UC-NRLF 


B   M   b7b   311 


AND 


REIiATI> 


INSURANCE 


XM) 


INSURANCE  COMPANIES 

FRATERNAL  BENEFICIARY  AND  WORK- 
MEN'S COMPENSATION  ASSOCIATIONS 


-  1922" 


COMPILED  BY  THE 


STATE  INSURANCE  DEPARTMENT 


LAWS  OF  MARYLAND 


RELATING  TO 


INSURANCE 


AND 


INSURANCE  COMPANIES 

FRATERNAL    BENEFICIARY    AND 

WORKMEN'S  COMPENSATION 

ASSOCIATIONS 


COMPILED  BY  THii 

STATE  INSURANCE  DEPARTMENT 


This  edition  of  the  Insurance  Laws  embraces  all  amendment^,i«^tt^^Q'Q^' 
including  the  Session  of  1922^,,,^ pU^^     'o 

THE  NUMBERING  OP  THE  SECTIGN^FOLLGWS.TilAT'OF 


BAGBY'S  ANNOTATE] 


OCTOBER,   1922 


,,ir^io>i*^'t- 


.  .  «  .  -,  , 


INDEX  TO 
CORPORATION  LAWS 

References  Are  to  Sections  of  Art.  23,  Except  where 
Otherwise  Stated 

A 

Section 

Acknowledgments  of  papers 3,  25,  29,  35 

Agents,  resident  (see  "Resident  Agents")- 

Amendments  before  stock  subscribed 6 

After  stock  subscribed 24,  25,  26,  27,  28 

Recording  and  recording  fees  for 25 

In  agreements  of  consolidation 29,  30,  31 

When   non-resident    attachment   against    domestic   corpora- 
tions   (note) 8A 

B 

Benevolent  societies  (see  "Societies"). 

"Blue  Sky  Law" Art.  32A.  page  112 

Bonds,  when  issued  to  be  approved  by  members  or  stockholders  7   (115) 

Bonus  tax,  payment  of 4,  5,  34B 

On  shares  without  par  value 34 

Closing  of  for  transfers  of  stock 12 

By-laws,  general  provisions  as  to 3  (g),  7  (8),  9-15,  17,  20,  21 

When  directors  may  make,  alter  or  repeal 12 

C 

Capital  stock  (see  "Stock"). 

Certificate  of  incorporation,  contents 2 

To  be  forwarded  to  State  Tax  Commission 4 

Fees  due  on  filing 4,  5 

May  authorize  issuance  of  stock  for  property,  etc 35C 

Certificates  of  stock  (see  "Stock"). 

Clerk  of  Superior  or  Circuit  Court,  defined 1   (^[2) 

To  record  charters,  amendments,  etc 25,  29,  35 

Consolidation  of  corporations  (agreement,  amendments  in  agree- 
ment, certificates  of,  dissenting  stockholders  of) 29-31 

Cumulative    voting 20 

D 

Deed  of  trust  to  secure  bond  issue 7   (1[5) 

Directors,  definition  of 1   (p) 

Classes    of 11 

Change  in  number  of 12 


669939 


II 


References  Are  To  Sections.  Section 

May  authorize  issuance  of  stock 35A-35D 

May  change  terms  of  unissued  stock 34 

Postponed  election  of 21 

Powers  of 10,  12,  25,  29,  32,  35 

Removal   of 16 

Vacancies    9,12 

Waiver  of  notice  for  meeting  of 23 

Dividends,   stock 35D  ^ 

Dividends,  not  limited  to  6  per  centum 34 

E 

Entire  property,  sale,  lease  or  exchange  of 32 

Evidence,  agreement  of  consolidation  as 30 

Certified  copy  of  by-laws  as 13 

Copy  and  recording  of  certificate  of  incorporation  as 5 

Copy  and  recording  of  certificate  of  amendment  as 25 

Execution  and  attachment  (see  "Attachment  and  Execution"). 

Executive    committee 10 

Exemption  from  taxation,  waiver  of  by  consolidation. 29 

F 

False  statements  or  entries  in  connection  with  issuance  of  stock  36 

Fiduciaries,  voting  of  shares  held  by 22 

Formation  of  corporations 2-5 

Forms — See  Appendix. 

Franchises,  from  municipal  corporations     32 

On  shares  without  par  value 34 

Fraternal  societies  (see  "Societies"). 

Fraudulent  promotions Art.  32A,  page  100 

G 

General  powers  of  corporations 7 

H 


Homestead  and  building  associations   (same  section  as  building 
and  homestead  associations). 

I 

Inconsistency  between  general  and  special  provisions  of  law. ...  1,  7 

L 

Stockholders  not  released  from 28 

Loan   corporations 34A 


Ill 

^fleferences  Are  To  Sections.  Section 

M 

Meetings,  general  provisions  of  law  as  to  stockholders',  members' 

and  directors' ^         22   "14-23 

May  dispense  with  notice  of 23 

Of  stockholders  to  be  held  in  this  State 17 

Members,  waiver  of  notice  of  meeting  by 23 

Of  non-stock  corporations  (see  "Stockholders  or  Members"). 

Mortgage,  to  secure  bond  issue 7  (<T5) 

N 
Notice  of  meetings 14-16 


Waiver  of 


23 


Office,  location  of  principal 1   (^5) 

Officers  of  corporations g 

Shares,  reduction   of 26-28    36A 

Organization  tax  (see  "Bonus  Tax"). 


Par  value,  bonus  and  franchise  tax  on  shares  without 34A 

Issuance  of  stock  for  less  than 35B,  35c 

Shares   without '  34  a 

President,  election  of 9 

Must  be  a  director 9 

Powers  of  corporations 7 

Principal  office,  change  in  location  of 8A 

Location  of ^   l^rgN 

Promotions,  fraudulent Art.  32A,  page  100 

Property,  issue  of  stock  for 35-35C 

Proxies    -q 

Q 

Quorum  at  meetings,  of  stockholders  or  members 17 

Of  directors g 

R 

Railroads  or  railways,  outside  of  State 1 

Consolidation   of 29 

Recording  and  recording  fees,  certificate  of  incorporation 4 

Certificate  of  amendment 25 

Certificate  of  consolidation 29 

Certificate  of  issuance  of  stock  for  services,  property  or  at 
less  than  par 35-35C 


IV 


References  Are  To  Sections.  Section 

Removal  of  directors 16 

Report,  annual,  to  be  made  by  president 74 

Resident  agents,  domestic  corporations 3    (D),  8A 

Sections  designated  not  to  be 1 

S 

Safe  deposit  companies 34A 

Sale,  lease'  or  exchange  of  corporate  property  as  an  entirety  to 

another  corporation 32 

Secretary  of  State,  amendments  of  charters  to  be  recorded  by.  .     25 

Certificates  of  incorporation  to  be  recorded 4 

Certificates  of  consolidation  to  be  recorded  by 29 

Services,  issue  of  stock  for 35,  (6),  35B,  35C,  35D 

(See  also  "Attachment  and  Execution"). 

State  Tax  Commission,  amendments  of  charters  to  be  filed  with.  .     25 

Certificate  of  incorporation  to  be  filed  with 4 

Certificate  of  consolidation  to  be  filed  with 29 

Certificate  for  issuance  of  stock  for  property,  services  or  at 

less  than  par  to  be  filed  with 35 

Authority  to  issue  for  property,  etc.,  may  be  contained  in 

charter    35C 

Books  may  be  closed  against  transfers 12 

Certificate    of 33 

Classes  of 34 

Convertible  securities,  meaning  of 35 

Gift  or  oequest  of  to  corporation 36A 

Issued  for  cash  at  less  than  par 35B,  35C,  35D 

Issued  for  services 35   (6)   35B,  35C,  35D 

Issued  for  property 35B,  35C,  35D 

Increase  of  authorized  capital 24-28 

Preferred  stock 33,  34 

Purchase  of  own  by  business  corporations 36A 

Redemption  of  at  not  less  than  par 34 

Reduction,  manner  and  method 24,  27-28,  36A 

Shares  without  par  value 34A 

Shares  without  par  value  not  to  be  convertible  into  stock 

having  par 34B 

Stock  transfer  act,  uniform 38 

Terms  of  unissued  may  be  changed  by  directors 34 

Unlawful  issuance  of 36 

Stock  dividends 35D  ^ 

Stockholders,    defined 1   (^4) 

Dissenting   31-32 

Meetings  of,  see  Meetings  (ante). 

Qualifications  for  voting 19 


V 


References  Are  To  Sections.  Secticn 

Stockholders  or  members,  vote  on  issue  of  bonds 7 

Vote  for  directors 8 

Vote  on  by-laws 12 

Vote  on  removal  of  director 16 

Vote  on  amendment  of  charter 25 

Vote  on  consolidation 29 

Vote  on  issue  of  stock  for  property  or  services  or  at  less 

than  par 35,  35B 

Vote   (share  corporations  only)   on   sale  or  lease  of  entire 

property    32 

Vote  for  corporation  to  acquire  its  own  stock 36A 

Who    constitute 14^ 

T 
Tax,  organization  (see  "Bonus  Tax"). 

U 

Usury,  not  allowed  as  defense  by  corporations lOOA 

V 

Vacancies,  in  board  of  directors 9,  12 

Vote,  proportion  may  be  greater  in  charter  or  by-laws  than  in  act  3A 

Voting,  by  corporation 18 

By  stockholder  or  member 19 

Cumulative   20 

W 

Of  exemption  from  taxation 29 

Of  notice  of  meetings 23 

Water  companies,  operating  outside  of  State 1 


VII 


INDEX  TO 
INSURANCE  LAWS 


Section  Page 
A 

AGENTS  AND  BROKERS 

Agents'  Licenses 59  101 

Application  for  Agents'  Licenses 60  101 

Brokers'   Licenses 65  105 

Broker's    Solicitor 66  107 

Insurance   Broker 64  105 

Non-Resident  Brokers 67  108 

Payment  of  Commission  to  Unauthorized  Agent....     62  104 

Penalties  for  Violation  of  Sections  64,  65,  66  and  67.     68  108 

Resident    Agent 63  104 

Revocation  of  License  of  Agent  or  Broker 61  103 

Sheriffs  Shall  Furnish  List  of  Insurance  Brokers.  .  .     69  109 

ARTICLE  XLVIII-A  INSURANCE 

Definitions     2  67  . 

F 

FRATERNAL  BENEFICIARY  ASSOCIATIONS 

Admission  of  Foreign  Associations 159  163 

Adverse  Publications 175  171 

Amendments  to  Constitution  and  Laws 165  166 

Annual  License 158  162 

Annual  Reports 166  166 

Application  for  Receiver 173  171 

Beneficiaries    148  155 

Benefits  147  154 

Benefits  Exempt  from  Execution 164  166 

Certificate    150  156 

Deferred    Payments 152  157 

Deficiency  Shown  by  Triennial  Valuation 171  169 

Distribution  of  Funds 154  158 

Examination  of  Domestic  Associations 172  169 

Examination  of  Foreign  Association 174  171 

Exemptions    146  154 

Exemptions     177  172 

Exemptions  from  Taxation 178  174 

Existing  Corporation,  Reincorporation 156  161 

Fraternal  Beneficiary  Association  Defined 143  153 

Funds    151  156 

Investments    153  1 57 

Liability  of  OflBcers  and  Members 162  165 


VIII 


Section  Page 

Limitation    Upon    Power    to    Waive    Provisions    of 

Association's  Laws 163  165 

Lodge  System  Defined 144  153 

Mergers  and  Transfers 157  162 

Organization    155  158 

Penalties     179  174 

Place  of  Meeting 161  165 

Provisions  to  Insure  Future  Security 170  168 

Qualifications  for  Membership 149  156 

Report  of  Valuation 169  168 

Representative  Form  of  Government  Defined 145  154 

Revocation  of  License 176  172 

Service  of  Process 160  164 

Standard  of  Valuation 168  167 

Valuation  of  Certificates 167  167 

FIRE  INSURANCE 

Impairment  of  Capital 77  112 

Insurance  of  Property  by  Guardians,  etc 70  109 

Lloyds  Insurance 78  113 

Penalties  for  Violation  of  Sections  71,  72,  73  and  74.  .  75  111 

Reinsurance    Reserve 76  112 

Stamping  Policies  in  Authorized  Companies 74  111 

Stamping  Policies  in  Unauthorized  Companies 73  111 

Unauthorized   Insurance 71  109 

When  Tax  Need  not  be  Paid 72  110 

FIRE  INVESTIGATION  BUREAU 

Companies  Shall  Report  Facts  Regarding  Losses. ...  58  100 

Examination  of  Persons  and  Premises 56  99 

Investigation  of  Fires 54  98 

Reports  of  Examinations  of  Fires 57  100 

Special  Deputy  for  Investigation  of  Fires 55  98 

G 
GENERAL  PROVISIONS 

Additional    Deposits 23     ^  76 

Admission  of  Foreign  Companies 29  79 

Annual  Statement 31  81 

Blue   Sky  Provisions 43  86 

Business  shall  be  Conducted  in  Own  Name 27  79 

Cancellation  and  Re-issue  of  Capital  Stock 19  74 

Capital   Stock 18  74 

Certificate  of  Authority  to  Domestic  Company 30  81 

Certificate  to  be  approved  by  Commissioner  before 

Recording    16  73 

Classes  of  Business  that  may  be  Combined 17  73 

Conditions  Precedent  to  Beginning  Business 33  83 


IX 

Section  Page 

Consolidation  of  Companies 48  90 

Deposit  by  Industrial  Life  Insurance  Companies.  ...  21  75 

Deposit  of  Securities  by  Domestic  Companies 20  75 

Deposti  of  Securities  by  Foreign  Companies 22  76 

Examination   of  Companies 50  93 

Exchange  and  Surrender  of  Deposits 24  76 

Formation  of  Insurance  Corporations 14  72 

Investment  of  Reserves 26  77 

License  Fees  of  Domestic  Life,  Fire,  etc.,  Companies  38  84 
License    Fees    of    Domestic    Surety    and    Casualty 

Companies    36  83 

License    Fees    of    Foreign    Fire    and    Miscellaneous 

Companies    35  83 

License  Fees  of  Foreign  Life  Companies 34  83 

License    Fees    of    Title    and    Mortgage    Guarantee 

Companies    37  84 

Liquidation  of  Insolvent  or  Illegally  Conducted  Com- 
panies      51  96 

Miscellaneous   Fees 40  84 

Misleading    Name 28  79 

Misrepresentation  of  Terms  of  Policy 46  89 

Penalties    53  97 

Penalties  for  Violation  of  Sections  44,  45,  and  46 47  89 

Powers  and  Purposes 15  72 

Proceedings  to  Vacate  Charter 52  96 

Production  of  Books,  etc 42  86 

Property  of  Foreign  Companies  in  Maryland 49  93 

Publication  of  Abstracts  of  Annual  Statements 32  82 

Rebating  Unlawful  (Fire  and  Miscellaneous) 45  88 

Rebating  Unlawful  (Life  and  Accident) 44  87 

Retaliatory   Provisions 41  85 

Sale  of  Income  from  Deposits 25  77 

Tax  on  Premiums 39  84 

I 
INSURANCE  DEPARTMENT 

Actuary    8  70 

Annual  Report  to  Governor 12  71 

Auditor    9  70 

Clerks    10  70 

Deputy  Insurance  Commissioner 6  69 

Examiner    7  69 

General  Powers  and  Duties  of  Commissioner 11  70 

Insurance  Commissioner;  Appointment  and  Term..  4  69 

Qualifications ;    Compensation ;   Bond 5  69 

Shall  Remit  Receipts  of  Office  Quarterly 13  72 

Title  and  Jurisdiction 3  68 


X 

Section  P:ge 
L 

LIFE,  ACCIDENT  AND  HEALTH  INSURANCE 

Bonds  Required  of  Industrial  Agents 100  128 

Conversion  of  Mutual  Life  to  Stock  Company 96  124 

Companies  Converted  Prior  to  July  1,  1916 97  127 

Fraud  Practiced   Against  Company 91  121 

Inadequate  Rates 89  120 

Impairment  of  Capital 94  122 

Insurance  of  Infants 98  127 

Insurance  of  Wife's  Sole  Use 83  118 

Insurance  or  Reinstatement  of  Unsound  Person....     88  120 

Life    Insurance    Companies 79  113 

Misrepresentation  in  Application 84  118 

Misrepresentation  of  Policy 90  120 

Misstatement  of  Age  in  Application 85  119 

Mutual  Industrial  Life  Insurance  Companies 95  122 

Penalty  for  Violation  of  Sections  90,  91  and  92 93  122 

Postponement  of  Dividends  on  Policies 86  119 

Reserves  for  Industrial  Accident  &  Health  Insurance     99  127 

Switching    Policies 92  121 

Underaverage    Risks 87  119 

Valuation  of  Policies 80  114 

Valuation  of  Policies  on  Lives  of  Infants 81  117 

Valuation  of  Securities 82  117 

M 

MUTUAL  INSURANCE  COMPANIES 

Admission  of  Foreign  Companies 120  140 

Assessments 118  139 

Dividends  on  Policies 126  143 

Employer  and  Employees  May  Agree  Upon  Scheme 

of   Compensation 129  145 

Impairment  of  Assets;   Insolvency 127  144 

Inconsistent  Provisions  of  Law  Repealed 131  147 

Investments  and  Deposits 115  137 

Investments  in  Real  and  Personal  Property 116  138 

Licenses  to  Foreign  Companies 121  141 

Loans  for  Business  Purposes 119  139 

Membership    Voting 113  137 

Mutual   Companies   May  Assume  Any   Risk  Except 

Life    Insurance 110  *  135 

Penalties    130  147 

Premiums    114  137 

Public  or  Private  Corporations  as  Members 112  136 

Reinsurance    124  143 

Requirements  Prior  to  Doing  Business Ill  135 


XI 


Section  Page 

Reserves   117  138 

Resident  Agent;  Policy  Forms 125  143 

Rules  for  Prevention  of  Accidents 128  145 

Tax  on  Premiums ;  Exemption 123  142 

Taxes,  Fees,  Reserves,  Reports,  Examinations 122  141 

R 

RECIPROCAL  EXCHANGES  AND  INTER-INSURERS 
All  Domestic  Corporations  Authorized  to  Exchange 

Contracts  of  Insurance 139  151 

Annual  Reports;  Examinations 138  151 

Attorney  Shall  File  Verified  Declaration 134  148 

Certificate  of  Authority 140  151 

Execution  of  Such  Contracts 133  148 

Limit  of  Liability 136  150 

Penalties     142  152 

Reciprocal  or  Inter-Insurance  Contracts;  Exemptions  132  147 

Reserves ;  Impairment  of  Assets 137  150 

Service  of  Process 135  149 

Taxes  and  Fees;  Agents'  Licenses 141  152 

S 

SURETY,  CAST' ALTY,  LIABILITY  AND  COMPENSATION  INSURANCE 

Certificate  of  Authority 103  129 

Claim    Reserves 106  130 

Corporate  Fiduciary  Shall  not  Act  as  Surety 104  130 

Corporate  Surety  Bonds  Authorized 101  128 

Fidelity,  Surety  and  Casualty  Claim  Reserves 108  134 

Liability  and  Compensation  Claim  Reserves 107  131 

Premium   Reserve 105  130 

Qualifications  and  Surplus 102  129 

Revocation  of  Licenses  of  Foreign  Companies 109  135 


XIII 


INDEX  TO 
WORKMEN'S  COMPENSATION  LAWS 

A  Section 

Accidents  to  be  reported 38 

Accountants — Appointment  of 5 

Actuaries — Appointment  of 5 

Administrative  expenses  to  be  assessed  against  insurance  car- 
riers      27 

Age  and  Experience — Wages  will  increase 47 

Agreement  for  employe  to  pay  premium 53 

Alien  dependents   36 

All  extra-hazardous  employments 32 

Annual   report   to   Governor 13 

Arbitration   Committee    40 

Appeal    56 

Clerk  to  send  certified  copy  of  judgment  to  Commission 59A 

Not  to  stay 56 

Summary  proceedings  56 

To  be  taken  within  30  days 56 

Appropriations    64 

Arise    *     *     *    Employment 14 

Assessments    26 

Assignment  of  compensation 52 

Assistants,  help  and  employes 5 

Assumption  of  risk 14 

Attachment  of  compensation 52 

Attorney-General,  legal  adviser 56 

Act  of  1920  effective Page  57 

B 

Bankruptcy  of  insurance  company 30 

Beneficiary  removing  out  of  State 44 

Paid  to  one  for  use  of  all 50 

Blacksmiths — Country — covered  by  election 63 

Blanks  12 

Books,  papers,  etc.,  must  be  furnished 7 

Both  extra-hazardous  and  non-extra-hazardous  employment. ...  14 

C 

Cancellation  of  policy 30 

Casual    employes 63 

Carriers — Common    63 

Certified  copy  of  testimony 11 

City — Covered    35 

Claim  to  be  made  in  30  days 39 


XIV 


Section 
Classify  industries  to  arrive  at  rateJ.i.i^l 

Clerks— Appointment  of .'       '.' ^^ 

Commission— Creation  of . . ...  *  * "  ';*■*'/  ' '  * ",' '  * ' '  '■  "  ",''l"\ ^ 

Continuous    session V. '••••••  •  •  •-. ,-. .' . . .' i 

Decision  by  two * 

Decision  by  prima  facie  correct "^ 

Duties  of ■  ■  ■ •  •  • 56 

Commission— Employes  of ' '  "■ ^ 

Equipment  of " "• 5 

Help  of  assistants " ^ 

Information  not  to  be  divulged ^ 

Quorum  to  transact  business. . .'. ^ 

Records  open  to  public ^ 

Removal  of  Commissioner. ..".'.'.".'. '  *  ^ 

Report  to  Governor ^ 

Rules  of  proceedings .' •  ^^ 

Salary   of 9 

Salary  of— How  payable.' ^ 

Seal    3 

Secretary   of 5 

To  approve  policies ^ 

Vacancies    * 29 

Common  law  rules  of  evidence ^ 

Compelled  to  Insure  in  State  Fund-When ^° 

Compensation  of  assistants  and  employes   ^^ 

Compensation— Schedule  of                          ^ 

Compensation  payable  to  one  dependent' for  'use'  of  'all In 

Continuous  session ^^»«  oi  an 50 

Contractor   independent 4 

Contributory  negligence. 60A 

Coverage  section 14 

Congress— When  it  I'egi'slates '.'.'..'. 32 

Continuing  jurisdiction  34 

Contract  of  employer  to  indemnify  'him'fr'om  ioss ^' 

Costs— Payment  of /  'um  loss 3q 

County— Covered 57 

Creation  of  State  Fund! 35 

16 

D 

Death — Proof    of 

Decide  cases  in  30  days 39 

Decision  of  two  Commissioners ^^ 

Decision  of  Commissioner  prima  faci'e  co'rrect ,1 

Decisions  of  Court  of  Appeals  ^^ 

Default  in  payment  of  State  Fund ^^^^  ^^ 

Definitions    22 

63 


XV 


Section 


Deliberate  intention  of  employer  to  cause  injury 45 

Dependents — Who  are 36 

Alien  36 

Desertion  of  husband  or  wife  for  one  year 43 

Depositions — How  taken 8 

Different  hazards  in  same  employment 1* 

Disfigurements    36 

Disposition  of  State  Fund  if  law  is  repealed 28 

Doctor's  report 39 

Domestic  Servants — covered  by  election 63 

E 

ETffective— When   law 67 

Elect— When    33 

Interstate  Commerce 33  and  34 

Act  of  Congress 33  and  34 

Not   extra-hazardous 33 

When  employment  is  not  covered 33 

Employer  or  employe  exempting  himself  from  the  Act 53 

To  report  accident 38 

Employes  of  Commission 5 

Equipment  of  Commission 5 

Evidence — Incriminating    '7 

Rules   of 10 

Stenographer's  certified  copy  of 11 

Examiners    5 

Execution  of  compensation  awarded 52 

Exempting  oneself  from  Act 53 

Expenses  of  employes 5 

Extra-hazardous — Non  14 

F 

Failure  to  insure 14  and  15 

Farm  laborers — covered  by  election 63 

Fatal    cases 39 

Fees — Witness    8 

Payable  by  whom 8 

For  legal  services 57 

Fellow-servant  doctrine 14 

Fraudulently  securing  compensation 41 

Funeral  expenses 37 

H 

Husband  and  wife  living  apart 43 

I 

Increase  in   compensation 40 

Incriminating  evidence 7 


XVI 


Section 

Information — Not  to  be  divulged 4 

Inspectors    5 

Insure — How    15 

State    Fund 15 

Stock  company 15 

Self    15 

Insurance    Commissioner 29 

Interstate    commerce 33  and  34 

Intra-State  commerce 33  and  34 

Intoxication    14  and  15 

Investment  of  State  Fund 25 

J 

Jurisdiction  of  employer  is  juisdiction  of  insurance  carrier 30 

Of  Insurance  company 30 

L 

Legal  Services — Fees  for 57 

Lien  on  award 57 

Living  apart 43 

Local  office  of  insurer 29 

Lump   sum 44  and  51 

M 

Marriage  after  injury 43 

Medical   attendance 37 

Medical    examination 42 

Minimum   age 33 

Mining— Definition    of 63 

Minor  sui  juris 48 

Misconduct— Wilful    46 

Misrepresenting  payroll 21 

N 

Non-extra-hazardous    14 

Notice  of  injury  to  employer 38 

Notice  of  injury  to  employer  is  notice  to  insurance  carrier 30 

O 

Oath  of  office 5 

Administered  by  whom 7 

Other  assistants 5 

Benefits  31 

Outside  lawful  scope  of  Act 60 

P 

Payroll — Uniform    20 

For  four  previous  months 21 

Misrepresenting    21 

Pecuniary  Gain  Business  for 63 


J 


XVII 


Section 

Physician's    report 39 

Policies  to  be  approved  by  the  Commission 29 

Cancellation  of 30 

Provision    of 30 

Premiums — Arriving    at 17  and  19 

How  payable 17 

Payable  by  employe,  void 53 

Presumptions    62 

Against  intoxications 62 

Against  wilful  misconduct 62 

That  claim  comes  within  Act 62 

Presumption  that  sufficient  notice  was  given 62 

Presumption  of  no  prejudice 62 

Prima  Facie  Correct — Decision  of  Commission 56 

Proof  of  Death 39 

Protection  and  safeguard 55 

Q 

Quorum  to  transact  business 2 

R 

Railroads    33  and  34 

Rates  of  premium 19 

Records  open  to  public 4 

Remarriage  of  dependent  widow 43 

Removal  of  Commissioner 1 

Removing  or  residing  out  of  State 44 

Repeal  of  Law — Disposition  of  pending  claims  and  awards 59 

Repeal  of — Former  Acts 65  and  66 

Report  to  Governor 13 

Of  Accident  by  employer 38 

Residing  out  of  State 44 

Rules  of  evidence 10 

Of  procedure .^ 9 

Of  procedure,  adopted  1920 Page  61 

S 

Safeguard  and  protection 55 

Salary  of  Commissioners 3 

How  payable 3 

Salary  of  Employes — How  fixed 5 

More  than  $2,000,  not  covered ^'6 

Schedule  of  compensation 36 

Seal  of  Commission 5 

Second  injury 43 

Secretary    5 

Powers  and  duties  of 6 


XVIII 

Section 

Self-insurance    

Separation  of  wife  and  husband V. 43 

Sixteen  Years  Old— May  himself  elect 33 

State,  county  and  city,  covered. . . 

State    Fund ^ 

15 

Consists  of  what 

Creation    of 

Dividends  to  policy  holders 19 

Surplus  and  reserve  fund ,    90 

State  Treasurer  custodian .'..'. 24      " 

State  Treasurer  to  invest  what .'.'.'.' 25 

Withdrawal  from 

State  Treasurer  to  be  custodian .'...'.'.".'.* 24 

To  invest  what 

Statutes  in  derogation  of  common  law ^1 

Stenographers  

Stock  company  insurance 

Submit  to  medical  examination 42 

Subpcenas  served  by  whom 

Sue  at  common  law ^ 

Summ-ary  proceedings  on  appeal 14  and  15 

56 

T 

Testify— Refusal   to 

Third  person  liable  for  injury ^ 

Threshing  and  harvesting '.'.'.' ^^ 

Two  thousand  dollars  salary,  not  covered .' ." .' .' '.'.'.['.'.  [ ..',[  [ " " .' .' .' '  [     H 

U 
Uniform    Payroll 

20 

V 

Vacancies  in  Commission 

Vesting  of  Compensation „"^ 

36 

W 

Wages— What  shall  be  considered 

Average    weekly 

Waiting  period ^^ 

Wheelwrights    ^^ 

Wife  living  apart  from  husband .'.'.'.".'.'.'.* 

Remarriage   of 

Wilful  intention  excluded ' , ^  ^ 

Misconduct    

Withdrawal  from  State  Fund 26 

Witness  Fees— Payable  by  whom o 


Maryland  Constitutional  Provisions 
Applicable  to  CorporatiQns. 

ARTICLE  m        ;     ;::v*;'\'  \^  1 1  A 

33.  *  *  *  the  General  Assembly  shall  puss  no 
special  law  for  any  case  for  which  provision  has  been  made 
b3'  an  existing  general  law. 

39.  The  General  Assembly  shall  grant  no  charter  for 
banking  purposes,  nor  renew  any  banking  corporation  now 
in  existence,  except  upon  the  condition  that  the  stockhold- 
ers shall  be  liable  to  the  amount  of  their  respective  share 
or  shares  of  stock  in  such  banking  institution,  fo^  all  its 
debts  and  liabilities  upon  note,  bill  or  otherwise;  the  books, 
papers  and  accounts  of  all  banks  shall  be  open  to  inspec- 
tion under  such  regulations  as  may  be  prescribed  by  law. 

See  notes  to  Sections  1  and  2  of  Article  23  of  the  Code, 
infra 

48.  Corporations  may  be  formed  under  general  la^s, 
but  shall  not  be  created  by  special  Act,  except  for  muni- 
cipal purposes,  and  except  in  cases  where  no  general  laws 
exist,  providing  for  the  creation  of  corporations  of  the 
same  general  character  as  the  corporation  proposed  to  be 
created,  and  any  Act  of  incorporation  passed  in  violation 
of  this  section  shall  be  void ;  all  charters  granted  or  adopt- 
ed in  pursuance  of  this  section,  and  all  charters  heretofore 
granted  and  created  subject  to  repeal  or  modification,  may 
be  altered  from  time  to  time,  or  be  repealed ;  provided 
nothing  herein  contained  shall  be  construed  to  extend  to 
banks  or  the  incorporation  thereof;  the  General  Assembly 
shall  not  alter  or  amend  the  charter  of  any  corporation 
existing  at  the  time  of  the  adoption  of  this  Article,  or  pass 
any  other  general  or  special  law  for  the  benefit  of  such  cor- 
poraton,  except  upon  the  condition  that  such  corporation 
shall  surrender  all  claim  to  exemption  from  taxation  or 
from  the  repeal  or  modification  of  its  charter,  and  that 


such  corporation  shall  thereafter  hold  its  charter  subject 
to  the  provisions  of  this  Constitution ;  and  any  corporation 
chartered  by  this  State  which  shall  accept,  use,  enjoy  or  in 
anywise  avail  itself  ;o|  any  rights,  privileges  or  advantages 
thataij.^  hei»^'a|tjgli  IW  granted  or  conferred  by  any  general 
or.  §peci.al.A<it,.  sha^lj 'b'e  conclusively  presumed  to  have 
tH-ej^b^  aUrrenaered' any*  exemption  from  taxation  to  which 
it  may  be  entitled  under  its  charter,  and  shall  be  there- 
after subject  to  taxation  as  if  no  such  exemption  has  been 
granted  by  its  charter. 

Even  under  the  power  herein  reserved  to  alter  charters, 
the  Legislature  could  not  change  fundamentally  the  nature 
and  character  of  the  charter  itself.  It  could  not,  under  the 
guise  of  amendment,  substitute  a  new  and  different  charter 
with  distinct  and  different  purposes,  and  oblige  the  stock- 
holders to  accept  it.  Nor  could  it  divest  property  rights  ac- 
quired under  the  legitimate  exercise  of  the  powers  granted. 
Webster  v.  Cambridge  Seminar}^  (1893),  78  Md.  193,  206,  28 
Atl.   25. 

See  also  Code,  Article  23,  Section  105,  infra. 

58.  The  Legislature,  at  its  first  session  after  the  ratifi- 
cation of  this  Constitution,  shall  provide  by  law  for  State 
and  municipal  taxation  upon  the  revenues  accruing  from 
business  done  in  the  State  by  all  foreign  corporations. 

As  to  taxation  of  foreign  corporations,  see  Code,  Article  23, 
Section  97,  and  note,  infra. 


CORPORATIONS 

ARTICLE  XXII 1. 

1.  (1)  Except  as  tlierein  otherwise  provided,  the  sec- 
tions of  this  Article,  numbered  1  to  37,  61  to  ()3  and  06 
to  104  all  inclusive,  shall  become  and  be  operative  on  and 
after  the  first  day  of  June,  in  the  year  nineteen  hundred 
and  eight  (1908),  and  the  provisions  thereof  shall  apply 
to  and  govern  all  corporations  then  existing  and  there- 
after formed,  and  all  corporate  acts  thereafter  done;  pro- 
vided (first),  that  nothing  in  said  sections  contained  shall 
be  construed  to  affect  the  existence  of  auy  tlien  existing 
corporation  or  to  impair  the  validity  of  any  corj)orate  act 
done  and  performed  in  accordance  wth  the  pre-existing 
law;  and  provided  (second),  that  in  the  event  of  any  in- 
consistency between  any  of  the  provisions  of  said  sections 
and  the  rights  conferred  by  any  special  act  or  any  legally 
authorized  agreement  of  consolidation  passed  or  filed  prior 
to  said  first  day  of  June,  in  the  year  nineteen  hundred  and 
eight  (1908),  the  provisions  of  said  special  act  or  agree- 
ment of  consolidaticm  shall  ])revail  to  the  extent  of  such  in- 
consistency;  and  provided  (third),  that  in  the  event  of  any 
inconsistency  between  any  of  the  provisions  of  said  sections 
and  the  provisions  made  for  particular  classes  of  corpora- 
tions by  the  subsequent  sections  of  this  Article,  the  latter 
sliall  prevail  to  the  extent  of  such  inconsistency;  and  pro- 
vided (fourth),  that  nothing  herein  shall  be  taken  or  con- 
strued as  preventing  the  formation  and  management  under 
the  provisions  of  said  sections,  and  without  reference  to 
the  provisions  made  for  particular  classes  of  corporations 
by  the  laws  of  this  State,  of  corporations  for  constructing, 
maintaining  and  operating  railroads  or  railways  or  tele- 
graph or  telephone  lines  to  be  located  entirely  outside  of 
this  State,  or  of  water  or  mining  corporations  conducting 
their  operations  entirely  outside  of  this  State;  and  pro- 
vided (finally),  that  unless  therein  otherwise  stated,  the 
said  sections  shall  be  available  to  all  corporations  of  this 


state  as  alternative  to  and  not  in  substitution  for  any 
inconsistent  piwisions  contained  in  any  such  special  act 
flZri'  0,  consolidation  or  in  the' provisos  Id 

(2)   The  words  "Clerli  of  the  Circuit  or  Superior  Court" 
u,^d  herein,  shall  be  taken  to  mean  the  Clerk  of  the  Circuit 

nZV  ^^f°"  ''''  °''  ^^^  ^''^^  °'  ^^^  Superior  Court  of 
Baltimore  City,  as  the  case  may  be. 

a  Jri  iTtr"'^  "directors"  shall  include  trustees,  man- 

pfration  bl^.^r""'  °'  *"'  ^"^•"""'"^  ""''^  «'  «'«  cor- 
poration, by  whatever  name  they  may  be  called. 

(4)   The  words  "stockholders"  and  "shareholders"  shall 
car,  il'  7"^         r  "•'  '"^'^  "'  corporations  having  no 

would  he  ■'  '"f  "!''  ^"''■'"'  ""'"^^  '^"Ch  construrtion 
would  be  inconsistent  with  the  context. 

shaTlwi' '°r"°°  '*  *'''  P"""P^'  °fflce  of  a  corporation 
shall  be  be  place  named  as  such  in  the  charter;  and  when 
the  ocation  of  the  principal  office  is  not  so  named,  itIbaU 
be  deemed  to  be  the  place  where  the  main  office  o  such 
corporation  in  this  State  for  the  transaction  of  bus^nesst 
actually  situated.  ousmess  is 

(6)   The  word  "Charter"  shall  include  charter  "ranted 

lUZlur'  '""T'''  "'  -corporation  and  agi^em  ^t 
ot  consolidation,  either  as  originally  passed  or  filed  or  as 

trrunS^"'^''  ^°""™"'°"  -""'^ "« '-°-'-"' 

lal  provisions  sovernins  banks  and  trust  compan  es  and 
insurance  and  surety  comnanies.  are  codified  as  Article  23 
of  the  Annotated  Code,  entitled  "Corporations/'     The  speela      ■ 

Te7::7niTn%t'T'''  '^'  ''''''  con..anies  are'co'S- 
TrVt    r  *^'  Annotated  Code,  entitled  "Banks  and 

Trust    Companies."     The    special    provisions    relating    to  Tn 

orthrL'tfof';;22'  "T.T'  "^^^  ^""^^^  ^^  ^^^-^-  492' 
ot  the  Acts  of  1922  as  Article  48-A.  entitled  "Insurance  "  Ar- 
ticles  11   and  48-A  and   the   special   provisions   of   Article  23 


relating  to  oarticular  classes  of  coroorations  are  not  includ- 
ed in  this  compilation,  although  the  scone  of  the  special  pro- 
visions of  Article  23  is  indicated.  These  special  provisions 
regulate  the  formation,  management  or  business  of  home- 
stead or  building  associations,  cemetery  companies,  loan  com- 
panies, mining  companies,  railroad  companies,  religious  cor- 
porations, safe  deposit  companies,  telegraph  companies,  tele- 
phone companies  and  "co-operative  associations."  There 
are  also  provisions  regulating  public  service  companies  of 
all  classes,  doing  business  in  the  State. 

The  special  provisions  governing  banks  and  trust  com- 
panies are  contained  in  "Laws  Relating  to  State  Banks, 
Trust  Companies  and  Savings  Institutions,"  a  compilation 
issued  by  the  Bank  Commissioner.  The  special  provisions 
governing  insurance  companies  of  all  kinds  and  surety  com- 
panies are  containing  in  "Laws  of  Maryland  Relating  to  In- 
surance and  Insurance  Companies,"  issued  by  the  Insurance 
Commissioner.  The  Public  Service  Commission  Law  is  pub- 
lished in  pamphlet  form  by  the  Public  Service  Commission. 

1916.  ch.  596. 

lA.  Nothing  in  the  Act  of  191G,  Chapter  506,  shall  be 
construed  to  affect  the  existence  of  any  corporation  exist- 
ing on  the  first  day  of  Jnne,  in  the  year  nineteen  liundred 
and  sixteen,  or  to  impair  the  validity  of  any  corporate  act 
done  or  performed  in  accordance  with  the  pre-existing  law ; 
and  nothing  in  said  Act  shall  release  any  corporation  from 
the  payment  of  any  tax  or  the  performance  of  any  obliga- 
tion to  the  State  or  to  any  county  or  city  tlierein  due  or 
existing  on  the  first  day  of  June,  in  the  year  nineteen  hun- 
dred and  sixteen,  or  affect  or  change  the  remedy  provided 
for  the  collection  or  enforcement  of  the  same;  and  nothing 
in  said  Act  shall  release,  affect  or  impair  the  rights  of  any 
creditor  or  creditors  of  any  corporation  or  the  obligations 
or  liability  of  any  corporation,  or  of  any  stockholder,  or  of 
any  corporate  officer  existing  on  the  said  first  day  of  June, 
in  the  year  nineteen  hundred  and  sixteen,  or  the  remedies 
to  enforce  or  protect  the  same. 

See  also  Sections  1  and  104. 
Section    lA  is   a   codification    of  the    saving   clause    of   Chap- 
ter 596  of  the  Acts  of  1916.     Chapter  545  of  the  Acts  of  1920 
and  Chapter  309   of  the  Acts  of  1922   contain  similar  saving 
clauses. 


Provisions  for  the  Formation  of  Corporations. 

1908,  ch.   240. 

2.  Corporations  may  be  formed  under  the  provisions  of 
this  Article  for  any  one  or  more  lawful  purposes,  except 
such  as  are  excluded  from  the  operation  of  a  general  law 
by  the  Constitution  of  this  State.  And  except  where 
special  provisions  inconsistent  herewith  are  made  in  this 
Article  for  particular  classes,  all  corporations  shall  be 
formed  in  the  manner  following: 

Municipal  corporations  and  banks  are  the  only  classes  of 
corporations  which  by  any  construction  of  the  Constitution 
could  be  held  to  be  excluded  to  anv  extent  from  the  opera- 
tion of  a  g-eneral  law.  See  Constitution,  Article  III.  Sections 
39  and  48.  sunra. 

As  to  particular  classes  of  corporations  for  which  special 
provisions  are  made  in  this  Article,  see  Section  1  and  notes. 

The  Attorney  General  has  ruled  that  banks  should  be  in- 
corporated under  the  provisions  of  Article  11  of  the  Code, 
and  that  none  of  the  provisions  of  Article  23  relatins:  to  the 
formation  of  corporations  generally  are  applicable  or  neces- 
sary to  be  followed.— 2  0|).  A-  G.  58    (1917). 

Religious  corporations  should  be  formed  under  the  provi- 
sions of  Sections  339-355  of  this  Article,  and  not  under  the 
general  provisions. — 2  Oi).  A.  G.  115  (1917). 

1916,  ch.  596. 

3.  The  incorporators,  being  any  three  or  more  adult  per- 
sons, shall  sign  and  at  least  three  of  them  shall  acknowl- 
edge a  certificate  of  incorporation  in  which  shall  be  stated : 

(a)  That  the  subscribers  thereto  (giving  their  names 
and  postofflce  addresses)  associate  themselves  with  the  in- 
tention of  forming  a  corporation  ; 

(b)  The  name  of  the  proposed  corporation,  which  shall 
always  be  such  as  to  indicate  that  it  is  a  corporation  as 
distinguished  from  a  natural  person  or  a  partnership. 
This  provision  shall  be  deemed  to  be  complied  with  if  the 
name  of  the  corporation  begin  with  the  word  "The"  and 
end  with  the  word  "Company,"  or  if  the  name  contain  the 
word  "Corporation"  or  the  word  "Incorporated" ; 


■   9 

(c)  The  purpose  or  purposes  for  which  the  corporation 
is  formed  and  the  business  or  objects  to  be  carried  on  and 
promoted  by  it; 

(d)  The  postoffice  address  of  the  place  at  which  the 
principal  oflfice  of  the  corporation  in  this  State  will  be 
located  and  the  name  or  names  and  jiostotlfice  address,  or 
addresses  of  the  corporation's  resident  agent  or  agents, 
(giving  in  each  case  the  county  and  city,  town  or  place  and 
street  and  number,  if  number  there  be)  ; 

(e)  The  total  amount  of  capital  stock,  if  any,  of  the 
proposed  corporation,  and  the  number  and  par  value  of  tlie 
shares;  and  the  restrictions,  if  any,  imposed  upon  the 
transfer  of  tlie  sliares.  If  tlie  capital  stock  is  to  be  classified 
under  the  power  hereinafter  granted,  tbe  certificate  of  in- 
corporation shall  also  set  forth  a  description  of  each  class, 
with  the  preferences,  voting  powers,  restrictions  and 
qualifications  of  each  class  and  the  number  and  par  value 
of  the  sliares  of  each  class; 

(f)  The  number  of  trustees,  directors  or  managers, 
which  sliall  not  be  less  than  three;  and  names  of  those  who 
shall  act  as  such  until  the  first  annual  meeting  or  until 
their  successors  are  duly  chosen  and  qualified ; 

(g)  Any  provisions  which  may  be  desired,  for  the  pur- 
pose of  defining,  limiting  and  regulating  the  powers  of  the 
corporation,  and  of  the  directors  and  stockholders,  or  any 
class  of  the  stockholders ;  provided,  such  provisions  are  not 
contrary  to  the  law  of  this  State  or  inconsistent  with  any 
of  the  terms  and  limitations  of  this  Article.  Any  provision 
which  is  hereinafter  in  this  Article  authorized  to  be  made 
in  the  by-laws,  may,  if  desired,  be  made  in  the  certificate  of 
incorporation. 

For  skeleton   form  of  certificate  of  incorooration,   see  Ap- 
pendix. 

As  to   officials  authorized   to  take  acknowledgments,    see 
Section    99A   and   note. 


10- 


(b)  Name. 

As  to  designation  of  corporation  in  suits,  see  Section  88, 
and  notes. 

Article  27.  Section  153.  makes  it  unlawful  for  a  corpora- 
tion, with  intent  to  defraud,  to  do  business  in  this  State  under 
a  name  similar  to  that  oreviously  used  bv  any  individual, 
firm,  cornoration.  etc..  or  to  imitate  such  name,  and  imposes  a 
penalty  for  so  doing. 

(c)  Puri)oses. 

See   Section   7   and   notes. 

(d)  Resident  Aprent. 

As  to   service    of   process   on,    see    Section    87. 

Section  8A  requires  the  resident  agent  to  be  "a  citizen  of  this 
State.  q,ctually  residing  therein,  or  a  cornoration  of  this 
State."  That  the  resident  agent  has  the  required  qualifica- 
tions  should  be  set  forth  in  the   certificate. 

(e)  CaDital  Stork. 

As  to  classes  of  stock  see  Section  34. 

As  to  conferring  authority  unon  Directors  to  fix  or  alter 
preferences,  voting  powers,  restrictions  and  qualifications  of 
unissued  stock,  see   Section  34. 

As  to  stock  without  nar  value,  see  Section  34A. 

As   to   convertible   stock,    see    Section    34B. 

As  to  provisions  which  may  be  inserted  in  certificate  author- 
izing issuance  of  stock,  see  Sections  35C  and  35D. 

As  to  insertion  of  DOwer  to  purchase  its  own  stock,  see 
Section  36A. 

For  authority  to  insert  provision  varying  rule,  see  Section 
19. 

Necessary  to   take  any  action. 

As  to  insertion  of  provision  prescribing  requisites  for  quo- 
rum  of  stockholders,   see   Section   17. 

For  provision  requiring  restrictions,  limitations  and  pre- 
ferences of  stock  to  be  plainly  stated  on  the  certificates 
therefor,  see  Section  33.     See  also  Section  52. 

Before  the  enactment  of  the  provisions  in  this  section 
authorizing  restrictions  upon  the  transfer  of  shares,  it  was 
held  that  a  by-law  requiring  any  stockholder  desiring  to  sell 
his  shares  to  give  the  other  stockholders  the  option  to  pur- 
chase them  at  the  price  he  could  obtain,  was  invalid  as  an 
unreasonable  restraint  on  the  alienation  of  property — Victor 
G.  Bloede  Co.  v.  Bloede  (1896),  84  Md.  129,  141,  34  Atl. 
1127   33   L.  R.  A.   107. 

(f)     Directors. 

As  to  changing  the  number  of  Directors,  see  Sections  8 
and  12. 


11 


(g)     Special  Provisions. 

As  to  provisions  whicli  may  be  made  in  tlie  By-Laws,  see 
Sections   10-12. 

As  to  insertion  of  provision  determining  quorum  see  Sec- 
tion  17. 

1920.    ch.    545. 

3A.  Provisions  in  the  charters  or  by-laws  of  corpora- 
tions of  this  State,  heretofore  or  hereafter  incorporated, 
requiring  for  any  purpose  the  "vote  of  the  holders  of  a  pro- 
portion of  tlie  shares  of  one  or  more  classes  of  stock  greater 
than  the  proportion  thereof  required  by  any  provision  of 
this  Article  for  such  purpose,  are  hereby  declared  legal  and 
binding. 

1920,  ch.  327. 

4.  Every  certificate  of  incorporation,  together  witli  a 
cop3^  thereof,  shall  be  delivered  to  the  State  Tax  Commis- 
sion, which,  upon  the  payment,  and  not  before,  of  the  re- 
cording fees,  for  which  provision  is  hereinafter  made,  iivd 
upon  the  payment,  and  not  before,  of  the  bonus  tax,  if  any, 
prescril)ed  by  law,  shall  receive  the  same  for  record,  and 
endorse  thereon  the  date  and  time  of  such  receipt  and 
promptly  record  the  same,together  with  the  endorsements 
thereon,  in  a  book  to  be  kept  for  that  purpose.  After  the 
recording  by  it  of  such  certificate  of  incorporation,  the 
State  Tax  Commission  shall  transmit  a  copy  thereof  duly 
certified  by  it  to  the  Clerk  of  the  Circuit  or  Superior  Court 
(according  to  the  location  of  the  principal  office  of  the  cor- 
poration), by  whom  the  same  shall  be  again  recorded.  At 
the  time  of  receiving  such  certificate  of  incorporation  for 
record,  the  State  Tax  Commission  shall  collect  a  minimum 
recording  fee  of  ten  dollars. 

See    Section   5    and   notes. 

For  amount  of  bonus  or  organization  tax,  see  Section  88A. 

See  Section  99B,  which  provides  that  no  charter  or  other 
paper,  wihch  is  not  in  conformity  with  law,  shall  be  received 
for   record. 

1916.  ch.  596. 

5.  When  such  certificate  of  incorporation  has  been  de- 
livered to  the  State  Tax  Commission  with  the  fees  provided 
for  in  Section  4  of  this  Article  and  the  bonus  tax,  if  any 


12 

payable,  and  not  before,  the  incorporators,  their  successors 
and  assigns,  shall  according  to  the  purposes,  conditions 
and  provisions  in  such  certificate  of  incorporation  contain- 
ed, become  and  be  a  body  corporate  by  the  name  therein 
stated.  A  duly  certified  copy  of  a  certificate  of  incorpora- 
tion, from  the  records  of  the  Secretary  of  State,  the  State 
Tax  Commission,  or  the  Clerk  of  the  Circuit  or  Superior 
Court,  shall  be  evidence  of  the  exstence  of  the  corporation 
and  of  its  rights  to  exercise  the  powers  therein  mentioned. 
The  recording  by  the  State  Tax  Commission  of  the  certifi- 
cate of  incorporation  shall  be  conclusive  evidence  of  the 
payment  of  the  recording  fees  and  the  bonus  tax,  if  any, 
required  by  law  to  be  paid  to  it,  and  of  the  existence  of  the 
corporation,  except  in  a  direct  proceeding  by  the  State. 

Only  those  certificates  of  incorporation  received  for  re- 
cord between  the  dates  of  April  16.  1914  and  September  30, 
1920,  both  inclusive,  have  been  recorded  in  the  office  of  the 
Secretary  of  State,  and  therefore  no  other  certificates  can 
be  certified  by  him.  See  Chapter  789  of  the  Acts  of  1914 
and  Chapter  327  of  the  Acts  of  1920   (Section  4  supra.) 

See  Section  99B.  which  provides  that  no  charter  or  other 
paper,  which  is  not  in  conformity  with  law,  shall  be  received 
for  record. 

When  a  corporation  is  formed  under  the  general  law,  no 
further  proof  of  the  acceptance  of  the  certificate  of  incor- 
poration is  required,  other  than  that  the  incorporators  have 
signed  and  acknowledged  it  and  filed  it  in  compliance  with 
the  provisions  of  the  statute.  Grlymont  Imp.  Co.  t.  Toler 
.(1894).  80  Md.  278,  30  Atl.  651.  HyattsvUle  Y.  Washin^on 
W,  &  Gc.  R.  Co-  (1914),  122  Md.  660,  668.  90  Atl.  515. 

No  meeting  of  the  incorporators  is  required  either  before 
or   after   filing   of  certificate  of  incorporation. 

1916.   ch.   596. 

6.  It  shall  be  lawful  for  all  of  the  incorporators  of  any 
corporation  having  capital  stock,  before  any  subscriptions 
to  stock  have  been  accepted  by  the  board  of  directors,  to 
amend  the  certificate  of  incorporation  in  the  following 
manner : 

An  amended  certificate  of  incorporation  shall  be  signed 
by  all  of  the  incorporators  who  signed  tlie  original  certifi- 
cate of  incorporation.     Such  amended  certificate  of  incor- 


13 

poration  shall  be  executed,  acknowledged,  delivered,  and 
recorded  in  the  same  manner  as  in  tlie  case  of  an  original 
certificate  of  incorporation,  but  no  bonus  tax  shall  be  pay- 
able except  in  respect  of  any  increase  in  authorized  capital 
stock,  and  upon  receipt  for  record  by  the  State  Tax  Com- 
mission, such  amended  certificate  of  incorporation  shall 
take  the  place  of  the  original  certificate  of  incorporation. 
Such  amended  certificate  of  incorporation  shall  contain 
only  such  provisions  as  it  would  be  lawful  and  proper  to 
insert  in  an  original  certificate  of  incorporation. 

For  method  of  amending  charter  when  there  is  stock  out- 
standing, see  Sections  24-28  and  34. 

1922,  ch.  309. 

7.  Every  corporation  whicli  is  subject  to  the  provisions 
of  this  Article  shall  have  the  following  general  powers,  exr 
cept  where  the  special  provisions  relating  to  any  particu- 
lar classes  of  corporations  are  inconsistent  herewith : 

( 1 )  To  have  perpetual  succession  by  its  corporate  name. 

(2)  To  sue  and  be  sued,  complain  and  defend  in  all 
courts. 

(3)  To  make  and  use  a  common  seal  and  alter  the  same 
at  pleasure. 

(4)  Transact  its  business,  carry  on  its  operations  within 
or  without  this  State,  and  to  exercise  in  any  other  state, 
territory,  district  or  possession  of  the  United  States,  or  in 
any  foreign  country,  so  far  as  the  laws  thereof  permit,  the 
powers  granted  by  this  Article. 

(5)  To  make  contracts,  incur  liabilities,  and  borrow 
money  for  its  corporate  purposes ;  and  to  issue  bonds,  notes 
and  other  obligations  and  secure  the  same  by  mortgage  or 
deed  of  trust  of  all  or  any  part  of  its  property,  franchises 
and  income;  provided  any  such  issue  of  bonds,  notes  or 
other  obligations  secured  by  mortgage  or  deed  of  trust  of 
any  of  the  franchises  of  the  corporation  shall  have  been 
authorized  at  any  meeting  duly  warned,  as  provided  for  in 


14 

Sections  15  or  16  of  this  Article,  by  the  aflftrmative  vote  of 
a  majority  of  all  its  members  or  a  majority  of  all  its  stt)ck 
(or  if  two  or  more  classes  of  stock  have  been  issued,  of  a 
majority  of  each  class),  outstanding  and  entitled  to  vote 
thereon. 

(6)  Subject  to  the  provisions  of  Article  38  of  the  Dec- 
laration of  Rights,  to  acquire  by  purchase  or  in  any  other 
manner,  and  to  take,  receive,  hold,  use  and  employ,  sell, 
mortgage,  lease,  dispose  of  and  otherwise  deal  with  any 
property,  real  or  personal,  situated  in  or  out  of  this  State, 
including  shares  in,  and  bonds,  notes  and  other  obligations 
of  other  corporations,  incorporated  under  the  laws  of  this 
State,  or  of  any  other  state  or  otherwise,  which  may  be  ap- 
propriate to  enable  it  to  carry  on  the  operations  or  fulfill 
the  purposes  named  in  the  charter. 

(7)  To  have  such  officers  and  agents  as  the  business  of 
the  corporation  may  require. 

(8)  To  make  by-laws  not  inconsistent  with  law  or  with 
its  charter  for  regulating  the  government  of  the  corpora- 
tion and  for  tlie  administration  of  its  affairs. 

(9)  Generally  to  exercise  the  powers  set  forth  in  its 
charter  and  those  herein  enumerated,  and  also  to  do  every 
other  act  or  thing  not  inconsistent  with  law  which  may  be 
appropriate  to  promote  and  attain  the  objects  and  pur- 
poses set  forth  in  its  charter. 

For  skeleton  form  of  certificate  of  incorporation,  see  Ap- 
pendix. 

As  to  special  provisions  relating  to  particular  classes  of 
corporations,   see   Sections   1   and   2    and   notes. 

As  to  perpetual   succession,  see  Section  100. 

As  to  convertible  securities,  see  Sections  34B,  35  and  notes. 

As  to  authorization  of  the  issuance  of  convertible  securi- 
ties,  see  Sections   35-35F  and   notes. 

As  to  issuance  of  bonds  by  a  consolidated  corporation,  see 
notes  to  Section  29. 

The  provisions  of  Article  38  of  the  Declaration  of  Rights 
impose  restrictions  upon  the  acquisition  of  property  by  cer- 
tain religious  corporations.  They  do  not  relate  to  business 
corporations   of   any   class. 


15 


As   to  officers,  see  Section   9  and   notes. 

As  to  by-laws,  see  Sections  10-12  and  notes. 

As  to  power  of  corporation  to  purchase  its  own  stock,  see 
Section   36A  and   notes. 

As  to  sale,  lease  and  exchange  of  property  and  assets  as  an 
entirety,  see  Section  32  and  notes. 

Power  To  Guarantee. 

A  contract  of  guaranty  entered  into  for  the  purpose  of 
promoting  the  business  for  which  the  company  was  incorpor- 
ated is  within  its  implied  powers. — Hagerstown  Brewing  Co. 
•  T.  Gates  (1912).  117  Md.  348.  83  Atl.  570. 

A  contract  of  a  railroad  company  to  guarantee,  out  of  its 
receipts  from  traffic  at  certain  stations,  payment  of  interest 
and  dividends  upon  the  bonds  and  stock  of  a  company  oper- 
ating a  summer  hotel,  not  at  a  station,  but  near  the  rail- 
road, held  not  within  the  implied  powers  of  the  railroad 
company  and  ultra  vires. — Western  Md.  R.  Co.  r.  Blue  Ridge 
Hotel  Co.  (1905),  102  Md.  307,  62  Atl.  351,  3  L.  R.  A.  (N.  S.) 
887. 

Mortgages  or  Deeds  of  Trust. 

Railroad  and  other  corporations  have  the  power  to  mort- 
gage after  acquired  property,  and  the  lien  of  the  mortgage 
is  regarded  in  equity  as  fastening  upon  the  property  as  soon 
as  it  is  acquired. — Dlggs  y.  Fidelity  &  Deposit  Co.  (1910), 
112  Md.  50,  72,  75,  Atl.  517;   113  Md.  239,     77Atl.  599. 

Property  may,  by  deed  of  trust  in  the  nature  of  a  mort- 
gage, be  subjected  to  a  lien  for  the  payment  of  future  debts 
and   obligations. — Ibid. 

Practicing  Law. 

Article  27,  Section  18A,  makes  it  unlawful  for  a  corpora- 
tion to  hold  itself  out  as  engaged  in  the  practice  of  law  or 
to  solicit  employment  in  connection  with  the  rendition  of  any 
legal  services.  This  section  does  not  apply  to  the  business 
of  examining  and  insuring  titles  to  real  property,  collect- 
tion  or  adjustment  of  mercantile  claims,  or  to  insurance 
corporations  defending  the  insured  under  a  policy  of  in- 
surance. 

Ultra  Vires. 

The  term  "ultra  vires,"  does  not  include  acts  void  for  fraud 
or  otherwise  illegal. — Pennsylvania  R-  Co.  v.  Minis  (1913), 
120    Md.    496,    87   Atl.    1062. 

Effect  of  Ultra  Vires  Acts. 

An  ultra  vires  contract  is  void.  Neither  party  is  estopped 
to  deny  its  invalidity,  and  no  recovery  can  be  had  on  the 
contract. — Western  Md.  R.  Co.  v.  Blue  Ridge  Hotel  Co.,  supra. 


16 


A  contract  that  is  simply  ultra  vires  is  not  necessarily- 
unenforceable;  it  may  be  enforced  under  certain  conditions. 
— Dictum  in  case  of  Maryland  Trust  Co.  t.  National  Mechan- 
ics Bank  (1906),  102  Md.  608,  615,  63  Atl.  70. 

In  case  of  an  ultra  vires  contract  completely  executed  on 
both  sides,  there  may  be  a  recovery  upon  a  quantum  meruit 
for  benefits  received. — Maryland  Hospital  y.  .Foreman 
(1868),   29   Md.   524. 

Powers  Irreg-ularly  Exercised. 

The  law  distinguishes  between  the  doing  by  a  corporation, 
of  an  act  beyond  the  scope  of  its  powers,  and  an  irregular- 
ity in  the  manner  of  exercising  its  granted  powers.  In  the 
latter  case,  the  rights  of  parties  having  no  actual  notice  of 
the  irregularity  or  not  properly  chargeable  therewith  are 
not  affected  by  the  failure  to  exercise  the  power  in  the  man- 
ner prescribed. — Hari'lson  v.  Annapolis,  etc,  R.  Co-  (1879), 
50  Md.  4  90;  Cahill  v.  Maryland  Life  Ins.  Co.  (1900),  90  Md. 
333,  45  Atl.  180,  47  L.  R.  A.  614;  France,  "Principles  of 
Corporation  Law,"  Sec.  79. 

Who  May  Raise  Question  of  Ultra  Tires? 

Question  may  be  raised  by: 

1.  A   stockholder. — DuPuy     t.     Transportation    &   T.   Co. 

(1896),   82   Md.   408,   33   Atl.   889,   34   Atl.   910. 

2.  A  party  to  the  transaction. — Western  Maryland  R.  C.  v. 

Blue  Ridge  Hotel  Co.,  supra. 

3.  The    State. — International   Fraternal   Alliance    v.    State 

(1898),  86  Md.  550,  39  Atl.  512,  40  L.  R.  A.  187. 
Question  may  not  be  raised  by  a  stranger,  unless  the  do- 
ing of  the  unauthorized  act  amounts  to  a  public  nuisance. — 
Diggs  V.  Morgan  College    (1918),  133  Md.   264,  105  Atl.   157. 


Officers,  Directors  and  By-Laws. 

1920,  ch.  545. 

8,  The  business  and  property  of  every  corporation  sub- 
ject to  the  provisions  of  this  Article  shall  be  conducted  and 
managed  by  a  board  of  not  less  than  three  directors,  man- 
agers or  trustees.  Until  the  first  annual  meeting  and  until 
their  successors  are  duly  chosen  and  qualified,  the  board 
shall  consist  of  the  persons  named  as  such  in  the  charter, 
subject,  however,  to  the  right  of  increase,  decrease  and  re- 


17 

moval  granted  by  this  Article.  Subject  to  the  provisions  of 
Section  11  of  this  Article,  the  members  of  succeeding 
boards  shall  be  elected  by  the  stockholders  or  members  of 
the  corporation  at  their  annual  meetings.  A  majority  of 
the  board  shall  constitute  a  quorum  for  the  transaction  of 
business. 

As  to  increase  and  decrease  of  number  of  directors,  see 
Section    12. 

As  to  powers  of  the  board  of  directors,  see  also  Sections 
10  and  12  and  notes. 

As  to  removel  of  directors,  see  Section  16. 

As  to  effect  of  failure  to  elect  directors  at  annual  meet- 
ing,   see   Section   21. 

As  to  when  notice  of  meeting  not  required,  see  Section  23. 

As  to  annual  meetings  of  stockholders,  see  Section  14  and 
notes. 

Directors  are  not  personally  liable  for  losses  sustained  by 
the  corporation  due  to  imprudence  in  the  exercise  of  their 
powers,  unless  the  imprudence  be  so  great  as  to  amount  to 
gross  negligence  and  consequently  to  a  breach  of  trust. — 
Carrin^on  y.  Basshor  (1912),  118  Md.  419,  439,  440,  84  Atl.  746. 

Directors  can  not  be  held  liable  collectively  for  the  acts 
of  the  board,  but  each  may  be  liable  for  his  own  acts,  wheth- 
er of  omission  or  commission,  and  therefore  the  respective 
liability  of  different  members  may  be  entirely  different — 
Ibid. 

Directors  occupy  fiduciary  relation  to  the  corporation  and 
its  stockholders,  and  are  not  allowed  to  derive  from  their 
position,  either  directly  or  indirectly,  any  profit  or  advan- 
tage whatever,  except  it  be  with  the  full  knowledge  and  con- 
currence of  the  corporation  represented  by  others  than  them- 
selves.— Acker,  Merrall  &  Condit  Co.  v.  3rcGa\v  (1907),  106 
Md.   536,  557,  68  Atl.  17. 

It  was  a  breach  of  duty  ior  a  director  to  take  in  his  own 
name  a  lease  of  premises  occupied  by  the  corporation  when 
the  interests  of  the  corporation  required  that  the  renewal  of 
the  lease  be  made  to  it. — Ibid. 

The  board  of  directors  of  a  corporation  sold  certain  stock 
held  by  it  to  another  corporation  having  common  directors. 
The  annual  report  of  the  president  and  directors  referring 
specifically  to  the  sale,  but  not  mentioning  the  price,  was 
adopted  and  approved  by  the  vote  of  more  than  a  majority 
of  the  stock  of  the  corporation.  In  a  suit  to  have  the  sale  set 
aside,  the  court  held  that  the  minority,  whether  present,  or 
absent,  were,  in  the  absence  of  fraud,  bound  by  the  majori- 


18 


ty's  ratification  of  the  action  of  the  board. — Pennsylvania  K, 
Co.  Y.  Minis  (1913).  120  Md.  461,  87  Atl.  1062;  120,  Md.  496, 
503,  87  Atl.  1062. 

A  transferee  of  shares  cannot  complain  of  the  payment  of 
excessive  salaries  in  which  his  transferor  has  acquiesced 
Nor  may  a  suit  in  respect  thereof  be  maintained  in  the  cor- 
porate name,  unless  there  are  some  stockholders  entitled  to 
relief  and  then  only  for  the  benefit  of  such  stockholders. — - 
Matthews  v.  Headley  Cliocolate  Co.  (1917),  130  Md.  523,  531, 
100   Atl.   645. 

The  court  would  not  be  authorized  to  substitute  its  judg- 
ment for  that  of  the  directors  as  to  what  are  proper  salaries, 
provided  they  acted  in  good  faith  within  their  powers,  and 
the  salaries  fixed  by  them  were  not  clearly  excessive. — 
Ibid.  535. 

Promoters  transferred  certain  properties  to  a  corpora- 
tion for  bonds  and  stock  thereof  at  an  alleged  over-valuation, 
thereby  becoming  the  holders  of  all  of  its  stock,  some  of 
which  they  subsequently  sold.  Held,  that  neither  the  cor- 
poration nor  its  receivers  could  maintain  an  action  against 
the  promoters  for  illegal  profits.  In  this  case  the  public  was 
not  invited  to  subscribe  for  any  stock. — Tompkins  t.  Sperry, 
Jones  &  Co.,  (1903)i,  96  Md.  560,  581,  54  Atl.  254. 

Contracts,  not  per  se  fraudulent  or  illegal,  but  which  may 
be  avoided  by  a  corporation  because  of  secret  or  illegal 
profits  of  promoters  or  directors,  do  not  require  ratification 
to  become  operative,  but  are  binding  until  avoided  by  a  ma- 
jority vote  of  the  directors  or  stockholders. — Urner  v.  Sol- 
lenberger   (1899),   89  Md.   316,  334,   43  Atl.   810- 

1916,  ch.  596. 

8A.  Every  corporation  of  this  State  incorporated  on  or 
after  June  1,  1916,  shall  have  at  least  one  resident  agent 
in  charge  of  its  principal  office  in  this  State.  Such  resident 
agent  shall  be  a  citizen  of  this  State,  actually  residing 
therein,  or  a  corporation  of  this  State.  Any  corporation 
of  tliis  State  incorporated  prior  to  June  1,  1916,  which  files 
with  the  State  Tax  Commission  the  location  of  its  principal 
office  and  the  name  and  postoffiice  address  of  at  least  one 
resident  agent  (giving  in  each  case  the  county,  and  city, 
town  or  place  and  street  and  number,  if  number  there  be), 
need  not  thereafter  have  a  director  who  is  a  citizen  or  a 
resident  of  this  State,  but  shall  be  thenceforth  subject  to 
the  provisions  of  this  section  relating  to  corporations  form- 


19 

ed  on  or  after  June  1,  1916.  No  amendment  to  the  charter 
of  any  such  corporation  shall  be  necessary  to  change  the 
location  of  the  principal  office  of  such  corporation  from  one 
place  in  the  county  or  the  City  of  Baltimore  to  another 
place  in  such  county  or  city,  or  to  make  any  change  what- 
soever in  the  names  or  addresses  of  any  resident  agents. 
Every  such  corporation  shall  notify  the  State  Tax  Com- 
mission promptly  of  any  change  (not  made  by  amendment) 
in  the  location  of  its  principal  office,  or  in  the  name  or  post- 
office  address  of  any  resident  agent  (giving  in  each  case  the 
county  and  city,  town  or  place,  street  and  number,  if  num- 
ber there  be).  The  State  Tax  Commission  shall  keep  a 
public  index  of  the  location  of  the  principal  offices  and  the 
names  and  addresses  of  the  resident  agents  of  all  such  cor- 
porations. Every  corporation  of  this  State  incorporated 
prior  to  June  1, 1916,  not  comph'ing  with  this  section,  shall 
have  at  least  one  director  who  is  a  citizen  of  this  State  ac- 
tually residing  therein. 

As  to  service  of  nrocess  on  resident  agent,  see  Section  87. 

As  to  designation  of  resident  agent  in  certificate  of  cor- 
poration,  see   Section   3   and   notes. 

Code.  Article  9.  Section  2.  as  amended  bv  Acts  of  1916, 
Chapter  596,  provides  that  "*  *  *  any  corporation  char- 
tered by  this  State,  which  for  a  period  of  ten  days  next  pre- 
ceding is  without  at  least  one  resident  agent,  whose  name 
and  postoffice  address  is  given  in  its  charter  or  filed  with  the 
State  Tax  Commission  in  conformity  with  Section  8A  of  Ar- 
ticle 23,  may  be  made  a  defendant  in  an  attachment  in  the 
same  manner  as  non-resident  individuals,  unless  such  cor- 
poration shall  have  been  incorporated  under  the  laws  of  this 
State  prior  to  June  1.  1916,  and  have  at  least  one  director 
who  is  a  citizen  of  this  State,  actually  residing  therein." 

See  also  Code,  Article  16,  Section  128,  as  to  process  in 
equity  actions  against  corporations  having  no  resident  di- 
rectors, officers  or  agents. 

1916,  ch.  596. 

9.  Every  corporation  subject  to  the  provisions  of  this 
Article  shall  have  a  president,  a  secretary  and  a  treasurer, 
all  of  whom  shall  be  chosen  by  the  board  of  directors  unless 
the  by-laws  otherwise  provide.     The  president  shall  be 


20 

chosen  from  among  the  directors.  The  corporation  may 
have  one  or  more  vice-presidents,  assistant  secretaries  and 
assistant  treasurers,  if  the  by-laws  so  provide,  all  of  whom 
shall  be  chosen  by  the  board  of  directors,  unless  the  by-laws 
otherwise  provide.  Any  two  of  the  above  offices,  except 
those  of  president  and  vice-president,  may,  if  provided  by 
the  by-laws,  be  held  by  the  same  person,  but  no  officer  shall 
execute,  acknowledge  or  verify  any  instrument  in  more  than 
one  capacity,  if  such  instrument  is  required  by  law  or  by 
the  by-laws  to  be  executed,  acknowledged  or  verified  by  any 
two  or  more  officers.  Except  when  otherwise  provided  the 
directors  and  officers  hereinbefore  mentioned  shall  hold 
office  for  one  year  and  until  their  successors  are  chosen  and 
qualified.  The  manner  of  filing  all  vacancies  occurring  in 
the  board  of  directors  or  among  the  officers  hereinbefore 
mentioned  shall  be  as  provided  in  the  by-laws;  and  in  de- 
fault of  such  by-laws  such  vacancies  shall  be  filled  by  the 
board  of  directors. 

As  to  term  of  directors,  see  Sections  8  and  11. 

As  to  corporate  acknowledgements  and  affidavits,  see  Sec- 
tions  99   and   99  A   and   notes. 

The  president  of  a  corporation,  who  was  authorized  to 
purchase  on  its  behalf  the  stock  of  another  corporation,  had 
implied  authority  to  contract  to  pay  a  commission  to  one 
through  v/hom  the  purchase  was  made. — ConseiTation  Co.  v, 
Stimpson,    (1920),   136   Md.    314,   110   Atl.   495. 

Notice  communicated  to,  or  knowledge  acquired  by,  the 
officers  or  agents  of  a  corporation  when  acting  in  their  official 
capacity  or  within  the  scope  of  their  agency,  becomes  notice 
to  or  knowledge  of  the  corporation  for  all  judicial  pur- 
poses.—Peninsula  Trust  Co.  T.  Johnson  (1916),  128  Md.  535, 
540,    97    Atl.    525. 

1920,  ch.  545. 

10.  The  board  of  directors  may  exercise  all  of  the  powers 
of  the  corporation,  except  such  as  are  by  law  or  by  the 
charter  or  by  the  by-laws  conferred  upon  or  reserved  to  the 
stockholders  or  members.  The  by-laws  may  provide  for  an 
executive  committee  of  two  or  more  members  to  be  elected 
from  and  by  the  board  of  directors;  and  to  such  committee 
may  be  delegated  any  or  all  of  the  powers  of  the  board  of 


21 


directors  in  the  management  of  the  business  and  affairs  of 
the  corporation,  to  the  extent  authorized  by  such  by-laws. 
The  by-hiws  may  fix,  or  authorize  the  board  of  directors  to 
fix,  the  number  of  members  of  the  executive  committee,  and 
the  by-laws  may  also  provide  that  during  the  temporary 
absence  of  a  member  of  the  executive  committee,  the  re- 
nuiiuing  members  ma^'  appoint  a  member  of  the  board  of 
directors  to  act  in  his  place. 

As  to  board  of  directors,  see  also  Section  8  and  notes. 

As  to  executive  committee,  see  also  Section  12. 

In  a  case  decided  before  there  was  statutory  authority  for 
an  executive  committee,  the  court  said  that  a  board  of  direc 
tors  undoubtedly  had  authority  "to  delegate  to  subordinate 
officers  or  agents  or  to  a  committee  of  their  own  number,  the 
power  to  perform  any  act,  in  the  course  of  the  business  of 
the  corporation,  which  they  themselves  can  legally  perform, 
even  though  the  performance  of  the  act  may  involve  the  ex- 
ercise of  the  highest  judgment  and  discretion,  provided  there  is 
an  express  authority  given  therefor,  or  it  is  implied  from 
usage  or  from  the  necessities  in  the  management  of  the  cor- 
poration. " — >Iarjh>n<l  Trust  Co.  v.  >ationa  Mechanics  Bank 
(1906),  102  Md.  608,  634,  63  Atl.  70. 

Power  of  Stockholders. 

As  to  issuance  of  bonds,  notes  and  other  obligations,   see 
Section    7. 

As  to  election  of  directors,  see  Section  8. 

As    to    By-Laws,    see    Section    12. 

As  to  amendments   of  charter,   see   Sections   24-28- 

As  to  consolidations,  see  Sections  29  and  31. 

As  to  sale,  lease  or  exchange  of  entire  property,  see  Sec- 
tion 32. 

As  to  issuance  of  stock  and  convertible  securities,  see  Sec- 
tions 35  and  35A-35D. 

As  to  purchase  by  a  corporation  of  its  own  stock,  see  Sec- 
tion   36A. 

1916,  ch.  596. 

11.  Every  corporation  may,  by  its  by-laws,  divide  its 
directors  into  classes  and  prescribe  the  tenure  of  office  of 
the  several  classes;  but  no  class  shall  be  elected  for  a 
period  shorter  than  that  from  the  time  of  election  follow- 
ing the  division  into  classes  until  the  next  annual  meeting, 
and  thereafter  for  a  period  shorter  than  the  interval  be- 


22 

tween  annual  meetings  or  for  a  longer  period  than  five 
years,  and  the  term  of  office  of  at  least  one  class  shall  ex- 
pire each  year. 

1920,  ch.  545. 

12.  Every  corporation  may,  subject  to  any  special  pro- 
visions of  this  Article  and  subject  to  the  provisions  of  its 
charter,  determine  by  its  by-laws:  The  manner  of  calling, 
the  time  and  place  of  holding,  and  the  manner  of  conduct- 
ing its  meetings  of  managers  and  stockholders,  including 
elections,  the  canvassing  of  votes,  the  method  of  verifying 
proxies,  the  powers,  duties  and  tenure  of  its  officers  and 
agents;  the  classification  and  number  of  its  directors, 
which  may  from  time  to  time  be  fixed  at  a  number  greater 
or  less  than  that  named  in  the  charter,  but  shall  never  be 
less  than  three;  the  manner  of  calling  and  conducting 
regular  and  special  meetings  of  the  board  of  directors, 
which  may  be  held  Avithin  or  outside  of  the  State  of  Mary- 
land, and  the  restrictions,  if  any,  on  their  powers :  the  ex- 
pendiency  of  providing  for  an  executive  committee  and  the 
powers  which  may  be  delegated  to  it;  the  conditions  under 
which  a'new  certificate  of  stock  may  be  issued  in  place  of 
the  one  which  is  alleged  to  have  been  lost  or  destroyed ;  and 
the  method,  in  general,  of  transacting  its  business.  The  by- 
laws may  authorize  the  board  of  directors,  by  the  vote  of  a 
majority  of  the  entire  board  of  directors,  to  increase  the 
number  of  directors  fixed  by  the  charter  or  by  the  by-laws 
within  a  limit  specified  in  the  by-laws,  and  to  fill  the  vacan- 
cies created  by  any  such  increase  In  the  number  of  direc- 
tors. The  by-laws  may  fix,  or  authorize  the  board  of  direc- 
tors to  fix,  the  time,  not  exceeding  twenty  days  preceding 
the  date  of  any  meeting  of  stockholders,  any  dividend  pay- 
ment date  or  any  date  for  the  allotment  of  rights,  during 
which  the  books  of  the  corporation  shall  be  closed  against 
transfers  of  stock.  In  lieu  of  providing  for  the  closing  of 
the  books  against  transfers  of  stock  as  aforesaid,  the  by- 
laws may  fix,  or  authorize  the  board  of  directors  to  fix,  a 
date,  not  exceeding  twent^^  days  preceding  the  date  of  any 
meeting  of  stock  holders,  any  dividend  payment  date  or  any 


23 

date  for  the  allotment  of  rights,  as  a  record  date  for  the 
determiDation  of  the  stockholders  entitled  to  notice  of  aiid 
to  vote  at  such  meeting,  or  entitled  to  receive  such  divi- 
dends or  rights,  as  the  case  may  be;  and  onl}'  stockholders 
of  record  on  such  date  shall  be  entitled  to  notice  of  and  to 
vote  at  such  meeting  or  to  receive  such  dividends  or  rights 
as  the  ciise  may  be.  The  members  or  stockholders  shall 
liave  full  power  to  make,  alter  and  repeal  by-laws,  but  the 
board  of  directors  of  anj^  corporation  liaving  capital  stock 
may  exericise  such  power,  if  there  are  no  shares  of  stock 
outstanding  and  entitled  to  vote  thereon.  If  authorized 
by  the  by-laws  adopted  as  aforesaid,  the  board  of  directors 
shall  have  the  ])ower  to  make,  alter  and  roi)eal  additional 
and  supi)hMiieutary  by-laws  not  inconsistent  with  any  of 
the  by-laws  adopted  as  aforesaid,  but  any  such  additional 
or  siipplomentary  l)y-]aws  nuiy  be  altered  or  repealed  by 
the  members  or  stockliolders. 

As   to   meetings    of   stockholders,   see   Sections    14-23. 

As  to  notice  of  meetines,  see  Sections  14,  15,  16  and  23. 

As  to  oroxies.  see  Section  19  and  note. 

As  to  Quorum,  see   Section    17. 

As  to  cumulative  votius.  see  Section  20- 

As  to  insertion  in  by-laws  of  provision  requiring  the  vole 
of  the  holders  of  a  greater  proportion  of  stock  than  re- 
quired by  statute,  see  Section  3A. 

As  to  issuance  of  new  certificates  of  stock  in  place  of  cer- 
tificates alleged  to  have  been  lost  or  destroyed,  see  Section  67. 
See  also  Section  50. 

As  to  restrictions  upon  the  transfer  of  stock,  see  Section 
3   and   notes. 

As  to  executive  committees,  see  Section   10   and  notes. 

As  to  officers,  see  Section  9. 

As  to  classification  of  directors,  see  Section  11. 
As  to  vacancies,  occurring  in  the  board  of  directors  and 
among  the  officers,  see  Section  9. 

As  to  the  board  of  directors  generally,  see  Sections  8  and 
10   and   notes. 

When  at  a  meeting  of  the  board  of  directors,  a  director 
votes  for  his  own  salary  as  an  officer,  pursuant  to  authority 
to  act  given  by  the  by-laws  adopted  by  the  stockholders, 
and  his  vote  is  essential,  the  act  is  not  void,  but  the  burden 
of  proof  is  upon  him  to  show  that  the  salary  is  just. — Francis 
T.  Brigham-Hopknis  Co.   (1908),  108  Md.  233.  70  Atl.  95. 


24 


A  by-law  provision  that  the  salaries  of  officers  "shall  be 
•  designated  nrevious  to  their  election"  held  to  be  directory  and 
that  a  resolution  fixing  salaries  adopted  after  election  was 
valid. — Ibid. 

Although  a  by-law  provided  that  the  decision  of  the  judges 
of  election  should  be  final  and  conclusive,  such  decision  held 
not  to  be  conclusive  in  the  case  of  fraud. — Triesler  y.  Wil- 
son  (1899),  89  Md,  169.  42  Atl.  926. 

1922,  ch.  309. 

13.  The  original  or  a  certified  copy  of  the  by-laws,  in- 
cluding all  amendments  thereto,  shall  be  kept  at  the  prin- 
cipal office  of  the  corporation  in  this  State,  and  shall,  dur- 
ing the  usual  business  hours  of  every  business  day  be  open 
for  the  inspection  of  every  stockholder  or  member  of  the 
corporation,  A  copy  of  the  by-laws  of  any  corporation  in- 
corf)orated  under  the  laws  of  this  State,  certified  to  be  a 
true  copy,  under  its  seal  by  the  president,  or  a  vice-presi- 
dent, and  the  secretary,  or  an  assistant  secretary,  or  the 
treasurer  or  an  assistant  treasurer,  thereof,  shall  be  re- 
ceived as  prima  facie  evidence  of  such  by-laws  in  the  courts 
of  this  State. 

As  to  location  of  principal  office,  see  Section  1. 


Meetings. 

1908,   ch.   240. 


14.  Every  corporation,  which  is  subject  to  the  provisions 
of  this  Article,  shall  hold  annually  a  stated  or  regular 
meeting  for  the  election  of  directors  and  for  the  transac- 
tion of  general  business;  the  time  and  place  of  holding 
such  meetings,  and  the  notice  to  be  given  thereof  and  of  the 
business  to  be  transacted  thereat,  may  be  regulated  by  the 
by-laws,  and  unless  otherwise  provided  by  the  by-laws,  each 
shareholder  or  member  shall  be  given  notice  of  the  place, 
day  and  hour  of  such  meeting  in  the  manner  provided  for 
in  the  next  succeeding  section ;  and  such  anniial  meetings 
shall  be  general  meetings — that  is  to  say,  open  for  the 


25 

transaction  of  any  business  within  the  powers  of  the  cor- 
poration without  special  notice  of  such  business,  unless 
such  notice  is  required  by  this  Article  OT  by  the  by-laws. 

As  to  place  of  meeting,  see  Section  17. 

As  to  when  notice  of  meetings  may  be  disoensed  with,  see 
Section   23. 

As  to  when  special  notice  of  business  to  be  transacted  is 
required,  see  Sections  7.  21.  25.  29.  32.  35B.  and  36A. 

As  to  number  of  votes  to  which  shareholder  is  entitled, 
see  Section  19. 

The  holders  of  a  majority  of  the  shares  at  an  annual  meet- 
ing adopted  and  approved  the  report  of  the  president  and  di- 
rectors. Such  action  constituted  the  ratification  of  the  acts 
of  the  president  and  directors  explicitly  referred  to  in  the 
report,  and  in  the  absence  of  fraud  was  held  to  be  binding 
on  the  minority,  whether  present  or  absent. — Pennsylvania 
R.  Co.  T.  Minis  (1913),  120  Md.  461,  487,  87  Atl.  1062;  120 
Md.  496.  503,  87  Atl.  1062. 

1922.  ch.  309. 

141^.  In  any  case  in  which  neither  the  charter  nor  the 
by-laAvs  of  a  corporation  having  no  capital  stock,  heretofore 
or  hereafter  incorporated,  provides  for  members  thereof  as 
such,  and  in  any  case  in  which  any  such  corporation  has 
in  fact  no  members  other  than  members  of  its  governing 
body  or  board  by  whatever  name  they  may  be  called,  the 
members  for  the  time  being  of  its  governing  body  or  board, 
shall,  for  the  purposes  of  any  statutory  provision  or  rule  of 
law  relating  to  members  of  corporations  having  no  capitaj 
stock,  be  taken  to  be  the  members  of  such  corporation,  as 
well  as  members  of  such  governing  body  or  board,  as  may 
meet  as  members  of  such  corporation  and  exercise  all  of 
the  rights  and  powers  of  members  thereof. 

15.  At  any  time  in  the  interval  between  regular  meet- 
ings, extraordinary  meetings  of  the  shareholders  or  mem- 
bers may  be  called  by  the  president,  or  by  a  majority  of 
the  board  of  directors,  or  by  a  majority  of  the  executive 
committee  (if  the  by-laws  provide  for  an  executive  commit- 
tee, and  confer  such  power  upon  such  executive  commit- 
tee), upon  ten  days'  written  or  printed  notice,  stating  the 


26 

place,  day  and  hour  of  such  meeting  and  the  business  pro- 
posed to  be  transacted  thereat ;  such  notice  shall  be  given  to 
each  shareholder  or  member  by  leaving  the  same  with  him 
or  at  his  residence  or  usual  x)lace  of  business,  or  by  mailing 
it,  postage  prepaid,  and  addressed  to  him  at  his  address,  as 
it  appears  upon  the  books  of  the  corporation ;  and  no  busi- 
ness shall  be  transacted  at  such  meetings  except  that 
specially  named  in  the  notice. 

As  to  place  of  meeting,  see  Section  17. 

As  to  when  notice  of  meetings  may  be  dispensed  with,  see 
Section    23. 

As  to  calling  a  meeting  by  stockholders,  see  Section  16- 

1916,  ch.  596. 

16.  Upon  the  request  in  writing  delivered  to  the  presi- 
dent or  secretary  or  any  director  of  a  majority  of  all  the 
members,  or  of  the  holders  of  a  majority  of  all  the  shares 
outstanding  and  entitled  to  vote,  it  shall  be  the  duty  of  such 
president,  secretary  or  director  to  call  forthwith  a  meeting 
of  the  stockholders  or  members.  Such  request  shall  state 
the  purpose  of  the  meeting,  and  notice  thereof  shall  be 
given  as  required  by  the  next  preceding  section.  If  the 
person  to  whom  such  request  in  writing  shall  have  been 
delivered  shall  fail  to  issue  a  call  for  such  meeting  within 
three  daj^s  after  the  receipt  of  such  request,  then  the  stock- 
holders owning  a  majority  of  the  voting  shares,  or  members 
constituting  a  majority  of  all  the  members,  may  do  so  by 
giving  fifteen  days'  notice  of  the  time,  place  and  object  of 
the  meeting  by  advertisement  inserted  in  a  newspaper  pub- 
lished in  the  county  or  city  in  which  the  principal  office  of 
the  corporation  is  situated.  At  any  meeting  called  and 
warned  under  provisions  of  this  and  the  next  preceding 
section,  any  director  may,  by  a  vote  of  a  majority  of  all  the 
shares  of  stock  outstanding  and  entitled  to  vote  or  by  a 
vote  of  a  majority  in  number  of  all  the  members,  be  re- 
moved from  office  and  another  be  appointed  in  the  place  of 
the  person  so  removed,  to  serve  for  the  remainder  of  his 
term. 


27 

As  to  Dlace  of  meeting,  see  Section  17. 
As  to  when  notice  of  meeting  may  be  disnensed  with,  see 
Section   23. 

1922,  ch.   309. 

17.  All  meetings  of  tbe  stockholders  or  members  shall 
be  held  in  this  State.  The  presence,  in  person  or  by  proxy, 
of  stockholders  or  members  entitled  to  cast  a  majority  in 
number  of  votes,  shall  be  necessary  to  constitute  a  quorum, 
unless  the  charter  otherwise  provides;  provided,  however, 
that  building  associations,  athletic  or  social  clubs,  or  mu- 
tual insurance  companies,  whose  policy-holders,  for  the 
time  being,  are  the  members  thereof,  and  corporations  hav- 
ing no  capital  stock  may  provide  by  their  by-laws  what 
shall  constitute  a  quorum.  Except  in  cases  in  which  it  is 
by  this  Article,  or  by  charter  or  by-law  provision  not  incon- 
sistent with  this  Article,  otherwise  provided,  a  majority  of 
the  votes  cast,  at  a  duly  constituted  meeting,  shall  be  suf- 
ficient to  elect  and  pass  any  measure.  If  so  provided  in  the 
by-laws  of  any  corporation  having  no  capital  stock,  any 
action  required  by  law  to  be  taken  or  authorized  by  the  af- 
firmative vote  of  a  majority  or  other  designated  proportion 
of  all  of  the  members  shall  be  effective  and  valid  if  taken  or 
authorized  by  not  less  than  a  majority  or  not  less  than  such 
other  designated  proportion,  as  the  case  may  be,  of  all  of 
the  votes  thereon  to  which  all  of  the  members  present,  in 
person  or  by  proxy,  at  a  duly  constituted  meeting  shall  be 
entitled. 

1916.  ch.   596. 

IS.  No  corporation  shall  directly  or  indirectly  vote  any 
shares  of  its  own  stock  except  such  as  it  holds,  and  is  by 
its  charter,  authorized  to  hold,  as  trustee,  committee, 
guardian,  executor,  administrator,  or  in  some  other  fiduc- 
iary capacity.  Corporations  holding  shares  in  other  cor- 
porations may  vote  the  same  by  such  officer,  agent  or  proxy 
as  the  board  of  directors  may  appoint  or  by  such  officer  as 
the  by-laws  may  provide. 

As  to  acauisition  bv  cornoration  of  its  own  stock,  see  Sec- 
tion 36A. 


28 

1922.  ch.  309. 

19.  Each  stockholder  of  every  corporation  of  this  State 
having  capital  stock  shall  be  entitled  to  one  vote  for  every 
share  of  stock  standing  in  his  name,  unless  otherwise  pro- 
vided by  the  charter;  but  no  shares,  original  or  increased, 
shall  be  voted  by  any  holder  if  any  installment  payable 
thereon  in  accordance  with  the  terms  of  the  subscription 
contract  or  duly  called  thereon  shall  be  overdue  and  un- 
paid. Notwithstanding  any  provision  of  law  requiring  any 
action  to  be  taken  or  authorized  by  the  af&rmative  vote  of 
the  holders  of  a  majority  or  other  designated  proportion  of 
the  shares  or  of  the  shares  of  each  class,  or  by  the  affirma- 
tive vote  of  a  majority  or  other  designated  proportion  of 
the  members,  or  to  be  otherwise  taken  or  authorized  by  vote 
of  the  stockholders  or  members  of  any  corporation,  such 
action  shall  be  effective  and  valid  if  taken  or  authorized  by 
such  vote  of  its  stockholders  or  members  as  may  be  re- 
quired for  such  action  by  its  charter;  but  in  the  case  of 
corporations  having  capital  stock,  the  requisite  number  of 
affirmative  votes  shall  not  in  any  case  be  less  than  a  ma- 
jority in  number  of  the  aggregate  number  of  votes  to  which 
the  holders  of  all  of  the  shares  of  each  class,  outstanding 
and  entitled  to  vote  thereon  shall  be  entitled,  except  in 
cases  in  which  the  law  authorizes  such  action  to  be  taken  or 
authorized  by  a  less  vote;  and  in  the  case  of  corporations 
having  no  capital  stock,  the  requisite  number  of  affirmative 
votes  shall  not  in  any  case  be  less  than  a  majority  of  all  the 
votes  thereon  to  which  all  of  the  members,  present  in  per- 
son or  by  proxy,  at  a  duly  constituted  meeting,  shall  be  en- 
titled, except  in  cases  in  which  the  law  authorizes  such  ac- 
tion to  be  taken  or  authorized  by  a  less  vote.  Stockholders 
or  members  may  vote  either  in  person  or  by  proxy,  but  no 
proxy  which  is  dated  more  than  three  months  before  the 
meeting  at  which  it  is  offered  shall  be  accepted,  unless  such 
proxy  shall,  on  its  face,  name  a  longer  period  for  which  it 
is  to  remain  in  force. 


29 

A  subsequent  proxy  revokes  a  former  one.  If  it  cannot 
be  determined  from  an  inspecion,  which  of  two  proxies  is 
the  later,  both  should  be  rejected.— Pope  T.  Wliitridge  (1909), 
110  Md.  468.   7S  Atl.   281. 

1908,  ch.  240. 

20.  Any  corporation  subject  to  the  provisions  of  this 
Article  may  by  its  by-laws  provide,  throuoh  einiuilative 
voting,  for  minority  representation  in  the  election  of  di- 
rectors. 

1908.  ch.  240. 

21.  If  it  shall  happen  at  any  time  that  an  election  of 
directors  is  not  made  on  the  day  desijjnated  therefor,  the 
corporation  shall  not  for  that  reason  be  dissolved;  but  it 
shall  be  lawful  on  any  other  day  (upon  due  notice  as  the 
by-laws  may  provide,  and  in  default  of  any  provision,  then 
upon  notice,  as  prescribed  by  Section  15  of  this  Article)  to 
hold  such  election  ;  and  all  acts  of  directors  so  holdino;  over 
shall  be  valid  until  their  successors  are  duly  chosen  and 
qualified. 

1908.  ch.  240. 

22.  Shares  standing  in  the  name  of  fiduciaries,  may  be 
voted  by  them,  and  fiduciaries  may,  upon  proof  of  title  and 
qualification,  vote  the  shares  standing  in  the  name  of  any 
person  for  whom  the^'  are  authorized  to  act  as  executor, 
administrator,  guardian,  trustee  or  committee.  A  pledger 
before  sale  shall  be  deemed  to  be  tlie  holder  of  his  shares 
for  the  purpose  of  voting  the  same. 

1916,   ch.  596. 

23.  Notice  of  the  time,  place  and/or  purpose  of  any 
meeting  of  members,  stockholders  or  directors,  whether  re- 
quired by  the  by-laws  or  by  any  provision  of  this  Article, 
or  otherwise,  may  be  dispensed  with  if  every  member  or 
stockholder  shall  either  attend  in  person  or  by  proxy,  or  if 
every  director  shall  attend  in  person,  or  if  every  absent 
member,  stockholder  or  director  shall,  in  writing  filed  with 
the  records  of  the  meeting,  either  before  or  after  the  hold- 
ing thereof,  waive  such  notice. 


30 

Amendments  After  Organization. 

1922.  cli.   309. 

24.  Every  corporation  of  this  State,  heretofore  or  here- 
after incorporated,  may  from  time  to  time  and  in  the  man- 
ner hereinafter  provided,  amend  its  charter  and  thereby 
accomplish  any  one  or  more  of  the  following  objects :  The 
addition  to  or  diminution  of  the  corporate  purposes  and 
powers,  or  the  substitution  of  other  purposes  and  powers 
in  whole  or  in  i)art  for  those  set  forth  in  the  charter;  the 
changing  of  the  corporate  business;  the  changing  of  the 
corporate  name;  the  changing  of  the  location  of  the  princi- 
pal office;  the  increasing  of  the  authorized  capital  stock 
by  increasing  the  number  of  shares  thereof  and  the  classi- 
fication, if  desired,  of  such  increase;  the  decreasing  of  the 
authorized  but  unissued  capital  stock  by  reducing  the  num- 
ber of  shares  thereof;  the  changing  of  the  number  and/or 
par  value  of  shares  of  the  capital  stock  or  of  any  class  there- 
of, provided  that  the  total  amount  of  outstanding  stock  is 
not  thereby  increased;  the  classification  or  re-classification 
of  all  or  any  part  of  the  capital  stock;  and  the  making  of 
any  other  amendment  of  the  charter  that  may  be  desired, 
provided  that  such  amendment  shall  contain  only  such  pro- 
visions as  it  would  be  lawful  or  proper  to  insert  in  an  origi- 
nal certificate  of  incorporation  made  at  the  time  of  making 
such  amendment.  No  amendment  of  the  charter  of  a  cor- 
poration shall  be  valid  which  changes  the  terms  of  any  of 
the  outstanding  stock  by  classification,  reclassification  or 
otherwise,  in  the  absence  of  a  reservation  in  the  charter  of 
the  right  to  make  such  amendment,  unless  such  change  in 
the  terms  thereof  shall  have  been  authorized  by  the  holders 
of  all  such  stock  at  the  time  outstanding,  by  a  vote  at  a 
meeting  or  in  writing  with  or  without  a  meeting;  and  in 
the  case  of  any  such  change  of  terms  of  outstanding  stock, 
the  articles  of  amendment  shall,  in  addition,  to  other  mat- 
ters required  by  law,  affirmatively  set  forth  that  the  holders 
of  such  stock  have  duly  authorized  such  change  of  terms. 
The  word  "terms"  as  used  in  this  section  in  reference  to 


31 

stock  is  intended  to  mean  only  the  contract  rights  of  the 
holders  tliereof  as  expressed  in  the  charter  and  shall  be  so 
construed. 

As  to  reserved  power  to  alter  charters,  see  Constitution, 
Article  III,  Section  48  and  note.     See  also  Section  105,  infra. 

As  to  the  filing  of  an  amended  certificate  of  incorDoration 
before   acceotance   of   subscrintions   to  stock,   see   Section   6. 

As  to  amendments  in  agreements  of  consolidation,  see  Sec- 
tion 29. 

As  to  stock  without  oar  value,  see  Section   34A. 

As  to  changing  number  of  directors,  see  Section  12. 

As  to  changing  location  of  orincipal  office  and  changing 
resident    agent,   see    Section    8A. 

As  to  pre-emptive  rights  of  stockholders  on  issuance  of 
increased    stock,   see    notes   to   Section    26. 

As  to  articles  supplementary  classifying  or  reclassifying 
unissued   stock,  see   Section   34. 

1920,  ch.   327. 

25.  Such  amendment  or  amendments  shall  be  made  in 
the  manner  following: 

(1)  The  board  of  directors  shall  pass  a  resolution  de- 
claring that  such  amendment  or  amendments  is  or  are  ad- 
visable and  calling  a  meeting  of  stockholders  or  members 
to  take  action  thereon.  The  meeting  of  the  stockholders  or 
members  shall  be  duly  warned  in  tlie  manner  provided  in 
Section  15  of  this  Article.  If  two-thirds  of  all  the  .shares 
(or,  if  two  or  more  classes  of  shares  have  been  issued,  two- 
thirds  of  oacli  class),  outf^itanding  and  entitled  to  vote,  or 
two-thirds  of  the  members  vote  in  favor  of  such  amendment 
or  amendments,  articles  of  amendment  setting  forth  such 
amendment  or  amendments  and  stating  that  the  same  has 
or  have  been  duly  advised  by  the  board  of  directors  and 
adopted  by  the  stockholders  or  members  shall  be  signed  and 
acknowledged  in  the  name  and  on  behalf  of  the  corpora- 
tion by  tlie  president  or  a  vice-president  with  the  corporate 
seal  attached,  attested,  by  the  secretary  or  an  assistant  sec- 
retary, and  the  matters  and  facts  set  forth  in  said  articles 
of  amendment  shall  be  verified  under  oath  by  the  chairman 
or  the  secretary  of  the  meeting  of  the  members  or  stock- 
holders at  which  such  amendment  or  amendments  was  or 


32 

were  adopted.  Sucli  articles  of  amendment,  together  with  a 
copy  thereof,  shall  be  delivered  to  the  State  Tax  Commis- 
sion, which,  upon  the  payment,  and  not  before,  of  the  re- 
cording fees  for  which  provision  is  hereinafter  made,  and, 
if  the  amount  of  the  authorized  capital  stock  be  increased 
thereby,  upon  the  payment,  and  not  before,  of  the  bonus  tax 
prescribed  by  law,  if  any  payable,  as  in  the  case  of  a  certifi- 
cate of  incorporation,  shall  receive  the  same  for  record  and 
endorse  thereon  the  date  and  time  of  such  receipt  and 
promptly  record  the  same  as  in  the  case  of  a  certificate  of 
incorporation.  After  such  recording  the  State  Tax  Com- 
mission shall  transmit  the  copy  of  such  articles  of  amend- 
ment, duly  certified  by  it,  to  the  Clerk  of  the  Circuit  or 
Superior  Court  (according  to  the  location  of  the  principal 
office  of  the  corporation  prior  to  such  amendment),  by 
whom  the  same  shall  again  be  recorded.  At  the  time  of  re 
ceiving  such  articles  of  amendment  for  record,  the  State 
Tax  Commission  shall  collect  the  same  recording  fees,  to 
be  computed  in  the  same  manner  as  is  the  case  of  a  certifi- 
cate of  incorporation,  and  the  same  to  be  divided,  account- 
ed for  and  paid  over  by  the  Commission  as  in  the  case  of  a 
certificate  of  incorporation. 

(2)  When  such  articles  of  amendment  have  been  deliver- 
ed to  the  State  Tax  Commission  with  the  recording  fees,  for 
which  provision  is  hereinbefore  made,  and  the  bonus  tax, 
if  any  payable,  the  amendment  or  amendments  made  there- 
by shall  take  effect  and  not  before.  A  duly  certified  copy 
of  such  articles  of  amendment  from  the  records  of  the  Sec- 
retary of  State,  the  State  Tax  Commission  or  the  Circuit 
or  Superior  Court  shall  be  evidence  of  the  amendment  or 
amendments  made  thereby.  The  recording  by  the  State 
Tax  Commission  of  the  articles  of  amendment  shall  be  con- 
clusive evidence  of  the  payment  of  the  recording  fees  and 
the  bonus  tax,  if  any,  required  by  law  to  be  paid  to  it,  ex- 
cept in  a  direct  proceeding  by  the  State. 

For  skeleton  form  of  articles  of  amendment,  see  Appendix. 
Only  those  articles   of  amendment  received  for  record  be- 
tween the  dates  of  June  1,  1916  and  September  30,  1920,  both 


33 


inclusive,  have  been  recorded  in  the  office  of  the  Secretary 
of  State,  and  therefore  no  other  articles  of  amendment  can 
be  certified  by  him. 

For  amount  of  bonus  or  organization  tax,  see  Section  88A. 

As  to  charter  and  by-law  nrovisions  requiring  vole  of  a 
greater  proportion  of  stockholders,  see  Section  3A. 

As  to  stock  without   par  value,   see   Section   34A. 

See  Section  99B,  which  provides  that  no  charter  or  other 
paper,  which  is  not  in  conformity  with  law,  shall  be  received 
for   record- 

1922,  ch.  309. 

20.  If  ail  increase  of  tlie  authorized  capital  stock  of  any 
corporation  shall  have  been  duly  anthorizetl,  as  in  SJection 
24,  provided,  the  articles  of  anieudmeut  shall  also  set  forth  : 

(a)  the  amount  of  capital  stock  theretofore  authorized; 

(b)  the  amount  of  additional  stock  authorized;  (e)  the 
classes,  if  any,  into  which  the  additional  stock  is  to  be 
divided,  with  tlie  preferences,  voting  poAvers,  restrictions 
and  qualifications  of  the  newly  authorized  shares;  and  (d) 
the  number  and  par  value  of  the  shares  of  newly  autlior- 
ized  stock,  and,  if  more  than  one  class,  the  number  and  par 
A'alue  of  the  shares  of  each  class. 

The  general  rule  is  that  when  the  capital  stock  of  a  cor- 
poration is  increased  by  the  issue  of  new  shares,  the  holders 
of  the  original  stock  are  entitled  to  subscribe  to  the  new 
stock  in  the  proportion  that  the  number  of  shares  held  by 
them  bears  to  the  whole  number  before  the  increase. — Real 
Estate  Trust  Co.  v.  Bird  (1899),  90  Md.  229,  244,  44  Atl.  1048. 

The  right  to  subscribe  to  increased  stock  belongs  to  whom- 
3ver  is  the  holder  of  the  original  stock  at  the  time  the  in- 
crease is  determined  upon.  If  a  stockholder  waives  to  the 
corporation  his  right  to  subscribe  to  new  shares,  and  subse- 
quently, but  before  the  authorization  of  the  issue  thereof, 
transfers  his  stock  to  a  person  who  has  no  notice  of  such 
waiver,  the  transferee  is  not  affected  by  the  waiver  and  is  en- 
titled to  subscribe  to  the  new  shares. — Ibid-,  246. 

Pre-emptive  rights  of  stockholders  may  be  qualified  or  reg- 
ulated by  the  terms  of  the  charter. — Ibid.  244. 

1916,   ch.  596. 

27.  If  a  reduction  of  the  authorized  but  unissued  capital 
stock  of  any  corporation  shall  have  been  duly  authorized 
as  in  Section  24  provided,  the  articles  of  amendment  shall 


34 

also  set  forth:  (a)  the  amount  of  capital  stock  theretofore 
authorized  aud  the  u umber  and  par  value  of  the  shares  and, 
if  more  than  one  class,  the  amounts  of  each  class  and  the 
number  and  par  value  of  the  shares  of  each  class;  (b)  the 
amount  of  capital  stock  issued  and,  if  more  than  one  class, 
the  amounts  of  each  class;  (c)  the  amount  of  the  reduction 
of  authorized  but  unissued  stock,  specifying  in  which  class 
or  classes  if  more  than  one  class,  the  reduction  is  to  be  ef- 
fected and  the  amount  of  the  reduction  of  each  class;  and 
(d)  the  number  and  par  value  of  the  shares  of  each  class  as 
reduced. 

1916  Ch.  596 

28.  When  by  a  reduction  of  the  number  and  /  or  par 
value  of  the  shares  of  stock  of  a  corporation,  the  amount 
of  stock  issued  is  thereby  reduced,  the  stock  representing 
the  difference  between  the  amount  theretofore  issued  and 
the  amount  or  the  stock  issued  as  thereb}^  reduced,  shall  be 
treated  as  authorized  but  unissued  stock  of  the  corporation, 
and  until  the  classification  or  classifications  thereof  be 
changed  shall  retain  the  classification  or  classifications 
obtaining  before  the  reduction.  No  reduction  of  the 
amount  of  the  capital  stock  outstanding  shall  release  the 
liability  to  the  corporation,  or  its  receiver,  trustee  or  other 
person  winding  up  its  affairs,  of  any  stockholder,  whose 
shares  have  not  been  fully  paid,  for  the  payment  of  its  lia- 
bilities existing  at  the  time  of  such  reduction.  If  any  pay- 
ments be  made  to  the  stockholders  representing  any  or  all 
of  such  reductions,  such  stockholders  shall  be  and  remain 
liable  to  the  corporation,  or  its  receiver,  trustee  or  other 
l)erson  winding  up  its  affairs,  to  the  extent  of  such  pay- 
ments made  to  them  for  the  payment  of  its  liabilities  exist- 
ing at  the  times  of  such  payments.  If  a  change  in  the  num- 
ber and  /  or  par  value  of  the  shares  of  capital  stock  of  any 
corporation,  by  which  the  amount  of  stock  issued  is  re- 
duced, shall  have  been  duly  authorized,  as  in  Section  24 
provided,  the  articles  of  amendment  shall  also  set  forth : 
(a)  the  amount  of  each  class  of  stock  theretofore  author- 
ized and  the  number  and  par  value  of  the  shares  of  each 


35 

class;  (b)  the  number  and  /  or  par  value  of  the  shares  of 
each  class  of  stock  as  changed  by  the  amendment;  (c)  the 
amount  of  such  reduction,  specifying  the  amounts  of  the 
reductions  of  each  class,  if  more  than  one  class  is  reduced; 
and  (d)  the  reclassifications,  if  any  of  the  stock  represent- 
ing the  difference,,  if  any,  between  the  amount  of  stock 
theretofore  issued  and  the  amount  of  the  issued  stock  as 
reduced. 

As  to  purchase  by  corporation  of  its  own  stock,  see  Sec- 
tion 36A. 

As  to  redemption  of  stock,  see  Sections   34  and   36A. 


ConsoUdatioji. 

1920,  ch.  327. 

29.  (1)  Any  two  or  more  corporations  having  capital 
stock,  now  existing  or  hereafter  formed  under  any  law  or 
laws  of  this  State,  which  have  been  or  shall  have  been 
duly  authorized  by  law  to  carry  on  in  whole  or  in  part  any 
kind  of  business  of  the  same  or  similar  nature,  nuiy  con- 
solidate, and  by  such  consolidation  form  one  new  corpora- 
tion ;  provided,  however,  that  the  provisions  of  this  Section 
and  of  Sections  30  and  31  of  this  Article  shall  not  be  held 
to  repeal  any  of  the  restrictions  imposed  by  this  Article  on 
the  consolidation  of  railroads  owning  or  operating  compet- 
ing or  parallel  lines,  and  provided  further  than  any  cor- 
poration which  shall  take  advantage  of  this  Section  shall 
be  deemed  to  have  waived  all  claim  to  exemption  from  tax- 
ation or  from  repeal  or  modification  of  its  charter. 

(2)  Such  consolidation  shall  be  made  in  the  manner 
following:  There  shall  be  an  agreement  of  consolidation 
between  the  consolidating  corporations  giving  (a)  the 
terms  and  conditions  of  the  proposed  consolidation;  (b) 
the  mode  of  carrying  the  same  into  effect;  (c)  the  name  of 
the  new  corporation  ;  (d)  the  postoflfice  address  of  the  place 
at  which  the  principal  office  of  the  corporation  in  this  State 
will  be  located,  as  in  the  case  of  a  certificate  of  incorpora- 


36 

tion  and  the  name  or  Dames  and  postoffice  address  or  ad- 
dresses of  the  resident  agent  or  agents  who  will  be  in 
charge  thereof,  as  in  the  case  of  a  certificate  of  incorpora- 
tion;  (e)  the  counties  in  this  State  in  which  any  of  the 
consolidating  corporations  own  property,  the  title  to  which 
could  be  aifected  by  the  recording  of  an  instrument  among 
the  land  records,  and  if  any  of  the  consolidating  corpora-- 
tions  own  such  property  in  the  City  of  Baltimore,  the  agree- 
ment of  consolidation  shall  so  state;  (f)  the  number, 
names  and  addresses  of  the  directors  and  the  names  of  the 
officers,  who  shall  act  as  such  until  their  successors  are 
duly  chosen  and  qualified;  (g)  the  amount  of  authorized 
capital  stock  of  each  consolidating  corporation  and  the 
total  amount  of  authorized  capital  stock  of  the  new  cor- 
poration and  the  number  and  par  value  of  the  shares;  (h) 
the  total  amount  of  capital  stock  of  the  new  corporation  to 
be  issued  for  stock  of  the  consolidating  corporations;  (i) 
the  restrictions,  if  any,  imposed  upon  the  transfer  of  the 
shares  or  of  any  of  them;  (j)  if  the  capital  stock  is  classi- 
fied, the  amount,  par  value,  preferences,  restrictions  and 
qualifications  of  each  class,  specifying  the  amount  of  each 
class  authorized  and  the  amount  of  each  class  to  be  issued 
for  stock  of  the  consolidating  corporations;  (k)  the  man- 
ner of  converting  the  capital  stock  of  each  of  the  consoli- 
dating corporations  into  stock  of  the  new  corporation ;  (1) 
all  such  otlier  provisions  and  details  which  shall  be  deemed 
necessary  to  perfect  the  consolidation.  The  agreement  of 
consolidation  may  also  contain  any  amendment  or  amend- 
ments which  may  be  desired,  but  if  such  amendment  or 
amendments  be  made  therein,  the  agreement  of  consolida- 
tion shall  contain  all  of  the  matters  and  things  required  to 
be  stated  in  articles  of  amendment  when  such  amendment 
or  amendments  is  or  are  made  under  the  provisions  of  Sec- 
tions 24  to  28,  inclusive,  of  this  Article;  and  no  amend- 
ment not  authorized  b}^  said  sections  may  be  made,  but  this 
provision  shall  not  prevent  the  issuance  of  an  amount  of 
stock  of  the  new  corporation  greater  or  less  than  the  stock 
of  the  consolidating  corporations  for  which  it  is  exchanged. 


37 

The  aiiTeeiiient  of  coiisolidatiou  shall  first  be  submitted  to 
the  boards  of  directors  of  the  coDSolidating  corporations, 
which  shall  pass  resolutions  declaring  that  such  consoli- 
dation is  advisable  and  calling  separate  meetings  of  the 
stockholders  of  the  respective  consolidating  corporations 
to  take  action  thereon.  The  meeting  of  the  stockholders 
shall  be  duly  warned  in  the  manner  provided  in  Section  15 
of  this  Article.  If  said  agreement  of  consolidation  be  ap- 
I>roved  by  the  affirmative  vote  of  two-thirds  of  all  of  the 
shares  (or,  if  two  or  more  classes  of  shares  have  been  is- 
sued, of  two-thirds  of  each  class),  outstanding  and  entitled 
to  vote,  of  each  consolidating  corporation  at  such  separate 
meetings,  it  shall  be  signed  and  acknowledged  in  the  names 
of  the  respective  consolidating  corporations  on  behalf 
thereof  by  their  respective  presidents  or  vice-presidents, 
with  their  respective  corporate  seals  attached,  attested  by 
their  respective  secretaries  or  assistant  secretaries.  There 
shall  be  attached  to  said  agreement  of  consolidation  the 
affidavits  of  the  chairman  or  the  secretaries  of  the  respect- 
ive stockholders'  meetings  that  the  same  was  duly  advised 
by  the  boards  of  directors  and  approved  by  the  stockholders 
of  their  respective  corporations.  Said  agreement  of  con- 
solidation, together  with  a  copy  thereof,  shall  be  delivered 
to  the  State  Tax  Commission,  which  upon  payment, and  not 
before,  of  the  recording  fees  for  which  provision  is  herein- 
after made,  and  upon  the  payment,  and  not  before,  of  the 
bonus  tax  prescribed  by  law,  if  any  payable,  as  in  the  case 
of  a  certificate  of  incorporation,  shall  receive  the  same  for 
record  and  endorse  thereon  the  date  and  time  of  such  rer 
ceipt  and  promptly  record  the  same  as  in  the  case  of  a 
certificate  of  incorporation.  After  such  recording,  the  State 
Tax  Commission  shall  transmit  the  copy  of  such  agreement 
of  consolidation,  duly  certified  by  it,  to  the  Clerk  of  tlie  Cir- 
cuit or  Superior  Court  (according  to  the  location  of  the 
principal  office  of  the  corporation,  as  stated  in  said  agree- 
ment of  consolidation),  by  whom  the  same  shall  again  be 
recorded.  The  State  Tax  Commission  shall  prepare  a  cer- 
tificate or  certificates  of  consolidation,  giving  the  names  of 


38 

the  consolidating'  corporations,  tlie  name  and  the  location 
of  the  principal  ofKce  of  the  new  corporation,  the  date  of 
the  agreement  of  consolidation  and  the  time  of  the  receipt 
of  the  same  for  record  in  the  office  of  the  State  Tax  Com- 
mission. One  of  such  certificates  of  consolidation  shall  be 
transmitted  by  the  Commission  to  the  Clerk  of  the  Circuit 
Court  of  each  county  in  which  any  one  of  the  consolidating 
corporations  owns  property,  the  title  to  Avhicli  could  be 
affected  by  the  recording  of  an  instrument  among  the  land 
records,  as  shown  by  the  agi'eement  of  consolidation,  and 
if  any  of  the  consolidating  corporations  owns  such  prop- 
erty in  Baltimore  City,  as  shown  by  the  agreement  of  con- 
solidation, one  of  such  certificates  shall  be  transmitted  to 
the  Clerk  of  the  Superior  Court  of  said  city.  Upon  receipt 
of  said  certificate  by  a  Clerk  of  a  Circuit  or  Superior  Court, 
the  same  shall  be  by  him  promptly  recorded  among  the  land 
records.  At  the  time  of  receiving  such  agreement  of  con- 
solidation for  record  the  State  Tax  Commission  shall  col- 
lect recording  fees  of  twenty  dollars;  six  dollars  of  the  fees 
so  collected  shall  be  paid  by  it  to  the  Clerk  of  the  Circuit 
or  Superior  Court  to  whom  a  copy  of  such  agreement  of 
consolidation  shall  be  transmitted  for  recording  as  afore- 
said, and  for  the  balance  it  shall  account  quarterly  to  the 
Comptroller  and  pay  the  same  forthwith  to  the  State  Treas- 
urer for  the  use  of  the  State.  In  addition  to  any  other  re- 
cording fees  required  by  law,  the  State  Tax  Commission 
shall,  at  the  time  of  receiving  the  agreement  of  consolida- 
tion for  record,  collect  a  recording  fee  of  two  dollars  for 
each  certificate  of  consolidation  required,  and  one-half  of 
each  such  fee  shall  be  paid  by  it  for  recording  the  same  to 
.  the  Clerk  of  each  Circuit  or  Superior  Court  to  whom  a  cer- 
tificate of  consolidation  is  transmitted  for  recording,  as 
aforesaid,  and  for  the  other  one-half  it  shall  account  quar- 
terly to  the  Comptroller  and  pay  the  same  forthwith  to  the 
State  Treasurer  for  the  use  of  the  State. 

As  to  amount  of  bonus  or  organization  tax,  see  Section  88A. 

The  effect  of  a  consolidation  is  the  extinction  of  the  life  of 
the  constituent  corporations  and  the  creation  of  a  new  cor- 
poration which  is  a  legal  unit,  and  not  a  mere  association  or 


39 


aggregation  of  co-existing  corporations.  The  rights  and  pow- 
ers received  by  it  from  the  State,  at  its  formation,  although 
identical  in  character  with  those  which  had  been  possessed  by 
the  extinct  corporations,  are  its  own  rights  and  powers. — 
Diggs  y.  Fidelity  &  Deposit  Co.  (.1910).  112  Md.  50,  74,  75  Atl. 
517. 

The  consolidated  corporation  cannot  issue  bonds  author- 
ized under  a  mortgage  of  a  constituent  company,  and  which, 
under  the  terms  of  the  mortgage,  were  reserved  to  be  issued 
for  property  after  acquired  by  the  constituent  corporation, 
since  the  property  was  not  acquired  by  it,  but  by  the  con- 
solidated corporation. — Ihid. 

1916,  ch.  596. 

30.  When  such  agreement  of  consolidation  has  been  de- 
livered to  the  State  Tax  Coniinission  Avith  the  fees  required 
by  Section  29  of  this  Article  and  the  bonus  tax,  if  any  pay- 
able, and  not  before,  all  of  the  property  and  assets  belong- 
iuii  to  said  consolidating  corporations  of  whatsoever  nature 
and  description,  and  all   the  jwwers  and  rights  and  all 
debts  and  liabilities  of  said  consolidating  corporations  of 
whatsoever  nature  and  description,  shall  be  devolved  upon 
said  new  corporation,  which  shall  be  regarded  as  substitu- 
ted by  operation  of  law  in  the  room  and  stead  of  said  con- 
solidating corporations;  and  from  the  time  of  the  delivery 
of    said    agreement    of    consolidation,    as    aforesaid,    any 
amendment  or  amendments  made  by  said  agreement  of  con- 
solidation shall  take  effect,  and  not  before.    A  duly  certi- 
fied copy  of  said  agTeement  of  consolidation  from  the  rec- 
ords of  the  Secretary  of  State,  the  State  Tax  Commission 
or  the  Circuit  or  Superior  Court,  shall  be  evidence  of  said 
consolidation  and  of  any  amendment  or  amendments  made 
by  said  agTeement  of  consolidation.     The  recording  by  the 
State  Tax  Commission  of  said  agreement  of  consolidation 
shall  be  conclusive  evidence  of  the  payment  of  the  record- 
ing fees  and  the  bonus  tax,  if  any,  required  by  law  to  be 
paid  to  it,  and  of  the  existence  of  said  consolidated  cor- 
poration, except  in  a  direct  proceeding  by  the  State. 

Only  those  agreements  of  consolidation  received  for  rec- 
ord between  the  dates  of  June  1,  1916,  and  September  30, 
1920,  both  inclusive,  have  been  recorded  in  the  office  of  the 


40 


Secretary  of  State,  and,  therefore,  no  other  agreements  of  con- 
solidation can  be  certified  by  him.  See  Chapter  596  of  the 
Acts  of  1916  and  Chapter  327  of  the  Acts  of  1920  (Section 
29,   supra). 

See  Section  99B,  which  provides  tliat  no  charter  or  other 
paper,  which  is  not  in  conformity  with  law,  shall  be  received 
for  record. 

1916,  ch.  596. 

31.  Any  stockholder  of  any  corporation  consolidating  as 
aforesaid,  who  at  such  meeting  voted  against  the  agree- 
ment submitted,  may,  within  twenty  days  after  the  agree- 
ment of  consolidation  has  been  delivered  to  the  State  Tax 
Commission  (but  not  afterwards),  make  upon  the  con- 
solidated corporation  a  written  demand  for  the  payment 
for  his  stock,  and  shall  thereupon  be  entitled  to  receive  the 
fair  value  thereof,  and  if  the  dissenting  stockholder  and 
the  consolidated  corporation  shall  fail  to  agree  upon  the 
fair  value  of  said  stock,  or  if,  having  agreed,  the  corpora- 
tion  shall  fail  to  pa^^  or  tender  the  amount  thereof,  the 
dissenting  stockholder  may,  within  thirty  days  after  such 
written  demand,  appl}^  by  petition  to  any  court  of  eiiuity 
having  jurisdiction  over  the  consolidated  corporation,  on 
reasonable  notice  to  be  furnished  b}^  said  court  to  said  con- 
solidated cori)oration,  for  the  appointment  of  three  disin- 
terested commissioners  to  appraise  the  fair  value  of  his 
stock  without  regard  to  any  depreciation  or  appreciation 
thereof  in  consequence  of  the  said  consolidation,  and  on 
the  coming  in  of  the  answer  to  said  petition,  the  court  shall 
pass  an  order  referring  the  matter  to  three  commissioners 
named  by  it,  for  the  purpose  of  ascertaining  such  value, 
and  such  order  shall  prescribe  the  time  and  manner  of  pro- 
ducing evidence,  if  necessary;  and  the  award  of  said  com- 
missioners (or  that  of  a  majority  of  them),  when  confirmed 
by  said  court,  shall  be  final  and  conclusive  on  all  parties, 
unless  any  stockholder  or  the  corporation  consolidating  as 
aforesaid,  feeling  aggrieved  at  the  said  action  of  tlie  said 
court,  shall  appeal  to  the  Court  of  Appeals  of  Maryland, 
which  right  of  appeal  from  sucli  action  of  the  court  is  here- 
by given,  and  said  consolidated  corporation  shall  pay  such 


41 


stockholder  the  value  of  his  stock  ascertained  as  aforesaid, 
and  on  receiving  such  payment  or  on  a  tender  thereof,  said 
stockliolder  shall  transfer  his  stock  to  the  said  consolidated 
corporation,  which  stock  shall  then  have  the  status  of  au- 
thorized but  unissued  stock;  and  in  case  the  award  is  not 
so  paid  within  thirty  days  from  the  filing  of  said  award 
and  confirmation  by  said  court,  or  in  case  of  an  appeal, 
Avithin  thirty  days  from  the  confirmation  of  said  award  by 
the  Court  of  Appeals,  and  notice  thereof  given  in  the  man- 
ner aforesaid  .unto  said  stockholder  and  the  said  con- 
solidated corporation,  the  amount  of  tlie  award  shall  be 
a  decree  against  the  said  consolidated  corporation  wliich 
decree  shall  be  a  prior  lien  to  any  mortgage  or  other  lien 
placed  on  its  property  or  franchises  by  said  consolidated 
corporation  and  may  be  collected  as  other  decrees  in  said 
court  are  bv  law  collectible. 


Sale,  Lease  or  Exchange  of  Entire  Property. 

1918,  ch.  466. 

32.  Every  corporation  of  this  State  having  capital  stock 
(except  railroads)  may  at  any  meeting  duly  warned  in 
accordance  with  the  provisions  of  Section  15  of  this  Arti- 
cle, sell,  lease  or  exchange  all  of  its  property  and  assets 
as  an  entirety,  including  its  good  will  and  franchises,  to 
and  with  any  other  corporation  organized  under  the  laws 
of  this  or  any  other  State  which  is  duly  authorized  to  ac- 
quire and  hold  such  or  similar  property.  An  agreement 
containing  the  terms  and  conditions  of  the  proposed  sale, 
lease  or  exchange  shall,  after  approval  by  the  Board  of 
Directors,  be  submitted  for  the  approval  of  the  stockhold- 
ers of  any  corporation  organized  under  the  laws  of  this 
State  which  shall  be  a  party  to  such  agreement  at  a  meet- 
ing warned  as  aforesaid;  and  if  approved  by  the  affirma- 
tive vote  of  two-thirds  of  all  the  stock  (or  if  two  or  more 
classes  of  stock  have  been  issued  of  two-thirds  of  each 
class)  outstanding  and  entitled  to  vote,  such  agTeement 
shall  be  executed  and  in  terms  and  conditions  performed 


42 

by  the  proper  officers  of  the  respective  companies.     Any 
stockholder  of  any  corporation  organized  under  the  laws 
of  this  State,  who,  at  such  meeting,  voted  against  the  agree- 
ment submitted,  may  within  twenty  days  after  such  meet- 
ing (but  not  afterward)  make  upon  his  corporation  a  writ- 
ten demand  for  payment  for  his  stock ;  and  he  shall  be  en- 
titled to  receive  an  amount  equal  to  the  fair  value  thereof, 
unaffected  by  such  sale,  purchase,  lease  or  exchange  of  the 
corporate  assets.     If  the  dissenting  stockholder  and  his 
corporation  shall  fail  to  agree  upon  the  fair  value  of  said 
stock   (or,  if  having  agreed,  the  corporation  shall  fail  to 
pay  or  tender  the  amount  thereof),  the  stockholder  shall 
be   entitled   to   file   against  his   said   corporation    in    any 
Court  of  Equity  having  jurisdiction  over  the  same,  a  pe- 
tition for  an  accounting  and  for  the  ascertainment  of  the 
fair  value  of  his  shares,  and  thereupon  such  proceedings 
shall  be  had  as  are  provided  by  Section  31  of  this  Article. 
The  proceeding  by  a  dissenting  stockholder  hereunder  shall 
not  prevent  or  delay  the  execution  and  performance  of  any 
agreement  so  ai)proved  by  the  affirmative  vote  of  two- 
thirds  of  the  stock ;  but  in  case  of  every  such  sale,  lease  or 
exchange,  the  vendee,  lessee  or  grantee  shall  take  the  prop- 
erty of  the  grantor  corporation  subject  to  its  debts  and  lia- 
bilities, including  the  claim  of  such  dissenting  stockholder; 
and  such  proi)erty  may  be  subject  to  execution  on  any  de- 
cree entered  as  herein  provided,  and  such  decree  shall  have 
priority  over  any  incumbrance  placed  by  the  grantee  cor- 
poration upon  the  property  so  bought,  leased  or  exchanged; 
provided,  however,  that  the  right  granted  to  a  dissenting 
stockholder  hereunder  to  demand  payment  for  his  stock 
shall  cease,  if  at  any  time  prior  to  the  entry  of  any  decree 
herein  provided  for,  the  defendant  corporation  shall  make 
it  appear  to  the  Court  that  the  agreement  of  sale,  lease  or 
exchange  has  been  rescinded  by  appropriate  corporate  ac- 
tion, so  that  the  stock  of  such  dissenting  shareholder  re- 
mains unaffected  thereby;  and  provided,  further,  that  the 
provisions  of  this  section  and  of  the  three  preceding  sec- 
tions shall  not  impair  or  affect  in  au}^  way  any  restrictions, 


43 


limitatioDS  or  other  provisions,  contained  in  any  ordinance 
granting  or  conferring  any  franchise  heretofore  passed  by 
any  municipal  corporation  of  this  State  prohibiting,  limit- 
ing or  restricting  the  transfer  or  assignment  of  such  fran- 
chise. 

Prior  to  the  enactment  of  this  section  it  was  held  that  a 
purely  private  corporation  could,  with  the  express  or  implied 
assent  of  all  its  stockholders,  sell  and  convey  the  whole  of  its 
property.— Stokes  v.  Detrich    (1892),  75  Md.  256,  23  Atl.  846. 

A  public  service  corporation  has,  however,  no  power  to 
alienate  its  franchises  and  property  without  legislative  au- 
thority.—State  T.  Coiisolidjition  Coal  Co.  (1877),  46  Md.  1,  10. 


Capital  Sto<k. 

1908,  ch.  240. 

33.  Each  stockholder  shall  be  entitled  to  a  certificate 
which  shall  be  signed  by  the  president,  or  vice-president, 
and  by  the  secretary  or  assistant  secretary  or  treasurer  or 
assistant  treasurer  of  the  corporation  and  sealed  with  its 
seal — which  shall  certify  the  number  of  shares  owned  by 
him  in  such  corporation.  All  certificates  for  stock  which 
is  restricted  or  limited  as  to  its  transferability  or  voting 
powers,  or  which  is  preferred  or  limited  as  to  its  dividends, 
or  as  to  its  share  of  the  principal  upon  dissolution — shall 
have  a  statement  of  such  restrictions,  limitation  or  prefer- 
ence plainly  stated  thereon. 

As  to  restrictions,  limitations  and  preferences,  see  Sec- 
tion 3  and  notes.    See  also  Section  52. 

Where  stock  stands  in  the  name  of  an  individual  followed 
by  such  words  as  "trustee"  or  "agent,"  there  is  a  presump- 
tion that  the  stock  is  held  for  another,  and  the  corporation 
may  refuse  to  issue  a  new  certificate  to  the  individual  or  his 
representatives  until  it  is  shown  that  the  individual  owned 
the  stock  in  his  own  right. — Tyson  v.  Georges  Creek  Coal 
Co.  (1911),  115  Md.  564,  81  Atl.  41;  Baltimore  Trust  Co.  v.  Ibid. 
(1912),  119  Md.  21,  85  Atl.  949;  Scott  T.  Gittings  (1915),  125  Md. 
595,  94  Atl.  209. 

In  connection  with  the  preceding  note,  see  Section  67A, 
which  was  enacted  as  a  result  of  the  situation  out  of  which 
the  litigation  in  the  cases  referred  to  arose. 


44 
1922,  ch.  309. 

34.  Every  corporation  may  create  two  or  more  classes  of 
stock  witli  such  preferences,  voting  powers,  restrictions 
and  qualifications  thereof  not  inconsistent  with  law  as 
shall  be  expressed  in  its  charter.  It  may  be  provided  that 
the  holders  of  a  certain  class  or  certain  classes  of  stock 
shall  receive  and  that  the  corporation  shall  be  bound  to 
pay  fixed  annual  dividends  thereon,  to  be  expressed  in  the 
charter,  payable  quarterly,  half  yearly  or  yearly,  before  any 
dividend  shall  be  set  apart  for  or  paid  to  the  holders  of 
some  other  class  or  classes  of  stock,  and  such  dividends 
may  be  made  cumulative;  any  class  or  classes  of  stock  may 
be  preferred  as  to  its  or  their  distributive  share  or  shares  of 
the  assets  of  the  corporation  upon  dissolution ;  but,  in  case 
of  insolvency,  the  debts  and  other  liabilities  of  the  corpora- 
tion shall  be  paid  before  an}^  payment  or  distribution  is 
made  to  the  holders  of  any  class  of  stock ;  and  stock  prefer- 
red as  to  dividends  or  having  a  preference  as  to  its  distribu- 
tive share  of  the  assets  of  the  corporation  upon  dissolution 
ma^^  be  made  subject  to  redemption  at  not  less  than  par  at 
such  times  and  prices  as  may  be  determined  in  such  char- 
ter; stock  so  redeemed  shall  have  the  status  of  autliorized 
but  unissued  stock  of  the  corporation.  Nothing  in  the  laws 
of  this  State  shall  be  so  construed  as  to  limit  the  dividend 
on  any  class  of  stock  to  six  per  cent,  per  annum  if  a  greater 
or  less  dividend  be  provided  to  be  paid  on  such  stock.  With- 
in the  meaning  of  this  section  and  other  sections  of  this 
Article  the  classes  of  capital  stock  of  any  corporation,  the 
preferences,  voting  powers,  restrictions  and  qualifications 
of  each  class,  the  fixed  annual  dividends  thereon  and  tlie 
times  and  prices  of  redemption  thereof  shall  be  sufficiently 
set  forth,  described,  expressed  and  determined  in  the  chart- 
er of  the  corporation  if  determinable  in  a  manner  set  forth 
in  the  charter  or  in  articles  supplementary  for  which  pro- 
vision is  liereinafter  made,  or  if  in  the  charter  the  board  of 
directors  is  empowered,  subject  to  any  limitations  or  re- 
strictions set  forth  in  the  charter  and  to  the  limitations 
and  restrictions  set  forth  with  respect  to  charter  amend- 


45 


meuts  in  Section  24  of  this  Article,  to  classify  or  reclassi- 
fy any  unissued  stock  by  fixing  or  altering  in  any  one  or 
more  specified  respects,  from  time  to  time  before  the  issu- 
ance of  such  stock,  the  preferences,  voting  powers,  restric- 
tions and  qualifications  of,  the  fixed  annual  dividends  on, 
and  the  times  and  prices  of  redemption  of,  such  stock. 
Whenever  the  board  of  directors,  so  empowered  in  the 
charter,  shall  so  fix  or  alter  the  preferences,  voting  powers, 
restrictions  or  qualifications  of,  the  fixed  annual  dividends 
on,  or  the  times  or  prices  of  redemption  of,  any  such  unis- 
sued stock,  and  before  any  such  stock  shall  be  issued,  a 
further  description  of  such  stock,  with  the  preferences, 
voting  powers,  restrictions  and  qualifications  thereof,  the 
fixed  annual  dividends  thereon,  and  the  times  and  prices  of 
redemption  thereof,  as  so  fixed  or  altered  by  the  board  of 
directors,  shall  be  set  forth  in  articles  supplementary  to 
the  charter,  which  articles  shall  be  verified  under  oath  by 
the  chairman  or  secretary  of  the  meeting  of  the  board  of 
directors  at  which  such  preferences,  voting  powers,  restric- 
tions, qualifications,  fixed  annual  dividends  or  times  or 
prices  of  redemption  shall  have  been  so  fixed  or  altered, 
and  shall  in  other  respects  be  executed,  acknowledged  and 
recorded  in  the  manner,  including  payment  of  the  same  re- 
cording fees,  prescribed  in  Section  25  of  this  Article  Avith 
respect  to  articles  of  amendment.  A  duly  certified  copy  of 
such  articles  supplementary  from  the  records  of  the  State 
Tax  Commission  or  the  Circuit  or  Superior  Court  shall  be 
evidence  of  the  classification  so  fixed  or  altered  and  there- 
i^  set  forth. 

As  to  authorization  of  the  issuance  of  stock,  see  Sections 
35-35F. 

For  provision  requiring  restrictions,  limitations  and  pref- 
erences to  be  plainly  stated  on  stock  certificates,  see  Section 
33.    See  also  Section  52. 

Calling  stock  preferred  stock  does  not  per  se  define  the 
rights  of  such  stock,  but  these  depend  on  the  statute  or  con- 
tract under  which  it  was  issued. — Heller  y.  Marine  Bank 
(1899),  89  Md.  602,  43  Atl.  800.  45  L.  R.  A.  438. 


46 


Except  as  its  rights  are  regulated  by  statute  or  contract  to 
the  authority  of  which  it  owes  its  existence,  preferred  stoclt 
is  upon  the  same  footing  as  common  stock. — Scott  v.  Baltimore 
&  0.  K.  K.  Co.  (1901),  93  Md.  475,  49  Atl.  327. 

A  provision  in  a  certificate  of  preferred  stock,  tliat  tlie 
liolder  is  entitled  to  receive  yearly  dividends  "up  to,  but  not 
exceeding,  4  per  centum,  before  any  dividends  shall  be  set 
apart  or  paid  upon  the  common  stock,''  when  construed  in  the 
light  of  the  agreements  of  the  parties  and  resolutions  of  the 
corporation  authorizing  the  issue,  limits  the  dividends  on 
such  preferred  stock  to  4  per  cent. — Ibid. 

To  maintain  a  suit  for  dividends  declared,  there  must  have 
been  a  previous  demand  by  the  stockholder  and  a  refusal 
by  the  corporation  to  pay;  neither  limitations  nor  interest 
begin  to  run  until  demand  has  been  made. — State  v.  Baltimore 
&  0.  R.  R.  Co.  (1847),  6  Gill  363. 

1920  ch.  545. 

34A.  Any  corporation  of  this  State,  heretofore  or  here- 
after incorporated,  except  a  banking,  safe  deposit,  trust  or 
loan  corporation,  may  create  one  or  more  classes  of  stock 
without  any  nominal  or  par  value,  with  such  preferences, 
voting  powers,  restrictions  and  qualifications  thereof  not 
inconsistent  with  law  as  shall  be  expressed  in  its  charter. 
Stock  without  par  value  which  is  preferred  as  to  dividends 
or  as  to  its  distributive  share  of  the  assets  of  the  corpora- 
tion upon  dissolution  may  be  made  subject  to  redemption  at 
such  times  and  prices  as  may  be  determined  in  such  charter. 
In  the  case  of  stock  without  par  value  which  is  preferred 
as  to  its  distributive  share  of  the  assets  of  the  corporation 
upon  dissolution,  the  amount  of  such  preference  shall  be 
stated  in  the  charter.  In  any  case  in  which  the  par  value 
of  the  shares  of  stock  of  a  corporation  is  required  to  be 
stated  in  a  certificate  of  incorporation,  articles  of  amend- 
ment, agreement  of  consolidation,  or  any  other  paper,  it 
shall  be  stated,  in  respect  of  shares  without  par  value,  that 
such  shares  are  without  par  value,  and  when  the  amount  of 
such  stock  authorized,  issued  or  outstanding  is  required  to 
be  stated,  the  nund)er  of  shares  thereof  authorized,  is- 
sued or  outstanding,  as  the  case  may  be,  shall  be  stated,  and 
it  shall  also  be  stated  that  such  shares  are  without  par 
value.    For  the  purpose  of  the  bonus  tax  and  annual  fran- 


I 


47 

f'bise  tax  imposed  by  the  laws  of  this  State,  but  for  no  other 
purpose,  such  shares  shall  be  presumed  to  be  of  the  par 
value  of  one  hundred  dollars  each.  For  the  purpose  of  any 
rule  of  laAv  or  for  any  statutory  provision  (except  as  in  this 
section  other^^■ise  provided)  relating  to  the  amount  of  such 
stock  issued,  the  amount  of  such  stock  issued  shall  be  taken 
to  be  the  amount  of  money  of  the  actual  value  of  tlie  con- 
sideration (fixed  by  the  board  of  directors  or  by  the  charter 
in  the  manner  provided  by  law,  as  the  case  may  be)  for 
Avhich  such  stock  shall  have  been  issued.  In  any  case,  how- 
ever, in  which  stock  having  a  par  value  shall  have  been 
issued  with  stock  without  par  value  for  a  particular  con- 
sideration, in  determining  the  amount  of  the  stock  without 
par  value  issued  therefor,  the  par  value  of  such  stock  hav- 
ing a  par  value  shall  first  be  deducted  from  the  amount  of 
money  or  actual  value  of  the  consideration  determined  as 
aforesaid,  and  the  excess  thereof,  if  any,  shall  be  taken  to 
be  the  amount  of  stock  without  par  value  so  issued.  The 
number  of  shares  of  such  stock  may  be  increased  or  de- 
creased in  the  manner  and  subject  to  the  conditions  pro- 
vided in  Sections  24  to  28,  inclusive,  of  this  Article.  The 
amount  of  such  stock  issued  may  also  be  reduced  in  the 
manner  and  subject  to  the  conditions  provided  in  said  sec- 
tions for  the  reduction  of  the  par  value  of  shares  of  stock. 
All  other  provisions  of  law  relating  to  stock  having  a  par 
value,  so  far  as  the  same  may  be  legally,  necessary  or  prac- 
tically applicable,  shall  apply  to  and  govern  stock  without 
par  value. 

As  to  authorization  of  the  issuance  of  stock,  see  Sections 
35-35F. 

As  to  liability  of  stockholders,  see  Sections  35E,  63,  66  and 
notes. 

For  amount  of  bonus  or  organization  tax,  see  Section  88A. 

For  amount  of  annual  franchise  tax,  see  Section  88D. 

1920,  ch.  545. 

34B.  The  charter  may  provide  that  shares  of  stock  of 
any  class  shall  be  convertible  into  shares  of  stock  of 
any  other  class  upon  such  terms  and  conditions  as  may  be 


48 


therein  stated,  except  that  shares  of  stock  without  par 
value  shall  not  be  convertible  into  shares  of  stock  having 
a  par  value.  For  the  purpose  of  the  bonus  tax  imposed  by 
the  laws  of  this  State,  the  authorized  amount  of  stock  of 
any  class  which  by  the  terms  of  such  charter  is  convertible 
into  stock  of  another  class  shall  be  taken  to  be  either  the 
amount  of  such  stock  authorized  by  such  charter  or  the  ag- 
gregate amount  of  the  stock  into  which  such  stock  is  con- 
vertible, whichever  is  the  greater. 

As  to  authorization  of  the  issuance  of  convertible  securities, 
see  Sections  35-35F. 

For  amount  of  bonus  or  organization  tax,  see  Section  88A. 

1920,  ch.  545. 

35.  (1)  Nothing  in  Sections  35  to  36,  inclusive  of  this 
Article  shall  be  taken  or  construed  as  limiting  or  affecting 
the  liability  of  stockholders  in  banking,  safe  deposit,  trust 
and  loan  corporations. 

(2)  The  term  "consideration  other  than  money''  is  used 
in  said  sections  includes  a  consideration  parth^  in  money. 

(3)  The  term  "convertible  securities"  as  used  in  said 
section  shall  be  taken  to  mean  obligations  of  a  corporation 
convertible  into  shares  of  its  stock. 

(4)  The  authorization  of  the  issuance  of  stock  of  any 
class  which  by  the  terms  of  the  charter  is  convertible  into 
stock  of  another  class  shall  constitute  the  authorization  of 
the  issuance,  in  accordance  with  the  terms  of  the  charter, 
of  the  stock  into  which  such  stock  is  convertible. 

(5)  The  authorization  of  the  issuance  of  convertible  se- 
curities shall  constitute  the  authorization  of  the  issuance, 
in  accordance  with  the  terms  of  such  convertible  securities, 
of  the  stock  into  which  they  are  convertible,  if  and  when 
sucli  stock  sliall  have  been  authorized  by  the  charter. 

(G)  Nothing  in  this  Article  shall  authorize  the  issuance 
of  stock  or  convertible  securities  for  personal  services  to 
be  rendered  in  the  future. 


49 


(7)  No  corporation  of  this  State  shall  issue  shares  of 
its  stock  or  convertible  securities  except  pursuant  to  au- 
thorization of  the  issuance  thereof  given  in  the  manner 
provided  in  Section  35A,  Section  35B,  Section  35C  or  Sec- 
tion 35L)  of  this  Article,  which  said  sections  shall  be  con- 
strued to  be  independent  and  separate  provisions,  and  in 
no  case  sliall  compliance  with  the  terms  of  more  than  one 
of  said  sections  be  required  in  connection  with  the  authori- 
zation of  the  issuance  of  any  stock  or  convertible  securi- 
ties. 

(S)  If  the  issuance  thereof  shall  have  been  authorized 
in  the  manner  provided  in  Section  35B  or  in  the  manner 
provided  in  Section  35C  of  this  Article,  fully  paid  and  non- 
assessable shares  of  stock  having-  a  par  value  or  securities 
convertible  into  fully  paid  and  non-assessable  shares  of 
such  stock  may  be  issued  for  a  consideration  in  money  less 
than  the  par  value  of  such  shares  or  of  shares  into  Avhich 
sucli  securities  are  convertible,  or  for  a  consideration  other 
than  money,  the  actual  value  of  which  is  less  than  the  par 
value  of  sucli  shares  or  of  the  shares  into  which  such  se- 
curities are  convertible. 

As  to  stockholders'  liability,   see   Sections  35E,  63,   66   and 
notes. 

As  to  pre-emptive  rights  of  stockholders,  see  notes  to  Section 
26. 

1920,  eh.  545. 

35A.  The  board  of  directors  of  any  corporation  of  this 
State  may,  from  time  to  time,  subject  to  any  limitation  or 
restriction  contained  in  the  charter  or  by-laws  of  such  cor- 
poration, authorize  the  issuance  of  shares  of  its  stock  of 
any  class  having  a  par  value  (except  stock  convertible  into 
stock  without  par  value),  for  money  at  not  less  than  either 
the  par  value  thereof  or  the  aggregate  par  value  of  any 
shares  of  stock  into  which  they  are  convertible,  whichever 
is  the  greater,  and  authorize  the  issuance  of  convertible 
securities  of  such  corporation,  except  securities  convertible 
into  shares  of  stock  without  par  value,  at  not  less  than  the 
par  value  of  the  shares  into  which  such  securities  are  con- 
vertible. 


50 


See  Section  35. 

For  definition  of  convertible  securities,  see  Section  35. 

1920,  ch.  545. 

35B.  Any  corporation  of  this  State  may,  from  time  to 
time,  subject  to  any  limitation  or  restriction  contained  in 
tlie  charter  or  by-laws  of  such  corporation,  issue  shares  of 
its  stock  of  an}^  class  pursuant  to  authorization  given  in  the 
manner  following: 

(1)  If  there  are  no  shares  of  stock  outstanding  and  en- 
titled to  vote  thereon,  the  board  of  directors  may,  by  reso- 
lution authorize  the  issuance  of  any  number  of  shares  of 
stock  of  one  or  more  classes,  and/or  any  amount  of  con- 
vertible securities,  from  time  to  time,  for  such  considera- 
tions as  said  board  of  directors  ma^^  deem  advisable.  The 
board  of  directors  shall,  by  resolution,  state  its  opinion  of 
the  actual  value  of  any  consideration  other  than  money  for 
which  it  authorizes  such  stock  and/or  convertible  securi- 
ties to  be  issued. 

(2)  If  there  are  shares  of  stock  outstanding  and  entitled 
to  vote  thereon,  the  board  of  directors  may,  by  resolution,- 
advise  the  stockholders  to  authorize  the  issuance  of  certain 
shares  of  stock  of  one  or  more  classes  and/or  certain  con- 
vertible securities  for  a  certain  specified  consideration,  and 
call  a  meeting  of  the  stockholders  to  take  action  thereon. 
The  board  of  directors  shall,  by  resolution,  state  its  opin- 
ion of  the  actual  value  of  any  consideration  other  tlian 
money  for  which  it  advises  that  suclt  stock  and/or  converti- 
ble securities  be  issued.  The  meeting  of  stockholders  shall 
be  duly  warned  in  the  manner  provided  in  Section  15  of 
this  Article,  and  at  such  meeting,  duly  called  and  warned 
as  aforesaid,  the  stockholders  may,  by  the  affirmative  vote 
of  two-thirds  of  the  shares  of  each  class  of  stock  outstand- 
ing and  entitled  to  vote  tliereon,  authorize  the  issuance  of 
all  or  any  part  of  such  stock  and/or  convertible  securities 
as  advised  by  the  board  of  directors. 

(8)  The  corporation  shall  prepare  a  statement  in  such 
form  as  may  be  i)rescribed  or  permitted  by  the  State  Tax 
Commission,  showing : 


51 


(a)  That  tlie  corporate  action  required  by  this  section 
has  been  duly  taken. 

(b)  In  the  case  of  stock  and/or  convertible  securities 
authorized  to  be  issued  for  money,  the  maximum  number 
of  shares  of  each  class  and/or  the  maximum  amount  of 

» 

convertible  securities  authorized  to  be  so  issued  and  the 
minimum  price  to  be  received  for  each  share  of  each  class 
or  the  minimum  price  to  be  received  for  a  given  number  of 
shares  of  one  or  more  classes,  and/or  for  a  given  amount  of 
convertible  securities,  as  the  case  may  be. 

(c)  In  the  case  of  stock  and/or  convertible  securities  au- 
thorized to  be  issued  for  a  consideration  other  than  monej^, 
the  number  of  shares  of  each  class  and/or  the  amount  of 
convertible  securities  authorized  to  be  issued  therefor,  a 
particular  description  of  such  consideration,  showing  its 
nature  and  character,  and  the  actual  value  of  such  consid- 
eration as  fixed  by  the  board  of  directors. 

(d)  The  terms  and  conditions  in  detail  upon  which  any 
convertible  securities  authorized  to  be  issued  are  converti- 
ble into  stock  of  the  corporation. 

(4)  Such  statement  shall  be  signed  and  acknowledged 
in  the  name  and  on  behalf  of  the  corporation  by  the  presi- 
dent or  a  vice-president,  with  the  corporate  seal  affixed  and 
attested  by  the  secretary  or  an  assistant  secretary,  and  the 
matters  and  facts  therein  set  forth  shall  be  verified  under 
oath  by  the  chairman  or  secretary  of  the  meeting  of  the 
board  of  directors  or  the  stockholders,  as  the  case  may  be, 
at  which  the  issuance  of  the  stock  and/or  convertible  se- 
curities therein  mentioned  shall  have  been  authorized. 

(5)  Such  statement,  together  with  a  copy  thereof,  shall 
be  delivered  to  the  State  Tax  Commission,  which,  upon  the 
payment,  and  not  before,  of  the  recording  fees  for  which 
provision  is  hereinafter  made,  shall  receive  the  same  for 
record  and  endorse  thereon  the  date  and  time  of  such  re- 
ceipt and  promptly  record  the  same;  and  the  State  Tax 
Commission  shall  forthwith  transmit  a  copy  thereof  duly 


52 


certified  by  it  to  the  Clerk  of  the  Circuit  or  Superior  Court 
(according  to  the  location  of  the  principal  office  of  the  cor- 
poration ) ,  by  whom  the  same  shall  be  again  recorded.  At 
the  time  of  receiving  such  statement  for  record  the  State 
Tax  Commission  shall  collect  recording  fees  of  five  dollars, 
two  dollars  of  which  shall  be  paid  by  it  for  recording  the 
same  to  the  Clerk  of  the  Circuit  or  Suf>erior  Court  to  whom 
a  copy  of  such  statement  shall  be  transmitted  for  record- 
ing, as  aforesaid,  and  for  the  balance  it  shall  account  quar- 
terly to  the  Comptroller  and  pay  the  same  forthwith  to  the 
State  Treasurer  for  the  use  of  the  State.  The  receipt  for 
record  of  such  statement  by  the  State  Tax  Commission 
shall  be  conclusive  of  the  i^ayment  of  the  fees  required  by 
law  to  be  paid  to  it,  except  in  a  direct  proceeding  for  the 
collection  of  the  same.  A  duly  certified  copy  of  such  state- 
ment from  the  records  of  tlie  State  Tax  Commission  or  the 
Circuit  or  Superior  Court  shall  be  prima  facie  evidence  of 
the  facts  therein  set  forth. 

(G)  After  the  receipt  for  record  of  such  statement  by 
the  State  Tax  Commission,  the  corporation  may  forthwith 
or  from  time  to  time  issue  the  stock  and/or  convertible  se- 
curities therein  mentioned  for  the  consideration  therein 
specified.  ' 

For  skeleton  form  of  stock  issuance  statement,  see 
Appendix. 

See  Section  35. 

For  definition  of  convertible  securities,  see  Section   35. 

See  Section  9  9B,  which  provides  that  no  charteil  or 
other  paper,  which  is  not  in  conformity  with  law,  shall  be 
received  for  record. 

1920,  ch.  545. 

3r)C.Tlie  charter  of  any  corporation  of  this  State  incor- 
porated on  or  after  June  1,  1920,  may  empower  the  board 
of  directors  thereof  to  authorize  the  issuance  from  time  to 
time  of  shares  of  its  stock  of  any  class  and/or  convertible 
securities  for  a  certain  specified  consideration  or  certain 
specified  considerations,  subject  to  such  limitations  and 
restrictions,  if  any,  as  may  be  set  forth  in  the  charter  or  in 


53 

the  by-laws  of  the  corporation.  Such  authorizatiou,  how- 
ever, shall  not  be  effective  for  the  purposes  of  this  section 
unless  such  charter  shall  be  set  forth: 

(a)  In  the  case  of  stock  and/or  convertible  securities 
authorized  to  be  issued  for  money,  the  maximum  number 
of  shares  and/or  the  maximum  amount  of  convertible  se- 
curities authorized  to  be  so  issued  and  the  minimum  price 
to  be  received  for  each  share  of  each  class  or  the  minimum 
price  to  be  received  for  a  given  number  of  shares  or  one  or 
more  classes  and/or  for  a  given  amount  of  convertible  se- 
curities, as  the  case  may  be. 

(  b  )  In  tlie  case  of  stock  and/or  couA'ertible  securities  au- 
thorized to  be  issued  for  a  consideration  other  than  money, 
the  number  of  shares  of  each  class  and/or  the  amount  of 
convertible  securities  authorized  to  be  issued  therefor,  a 
particular  description  of  such  consideration,  showing  its 
nature  and  character,  and  the  actual  value  of  such  consid- 
eration as  fixed  by  the  incorporators. 

(c)  The  terms  in  detail  upon  which  any  convertible  se- 
curities authorized  to  be  issued  are  convertible  into  stock 
of  the  corporation. 

For    definition    of   convertible   securities,    see    Section    35, 
certificate  of  incorporation  in  Appendix. 
See  Section  3  5. 
For  definition  of  convertible  securities,  see  Section   3  5. 

1920,  ch.  545. 

35D.  The  charter  of  any  corporation  of  this  State  incor- 
porated on  or  after  June  1,  1920,  may  empower  the  board 
of  directors  thereof  to  authorize  the  issuance  from  time  to 
time  of  shares  of  its  stock  without  par  value  of  any  class 
and  securities  convertible  into  shares  of  its  stock  without 
par  value  of  any  class  for  such  considerations  as  said  board 
of  directors  may  deem  advisable,  subject  to  such  limita- 
tions and  restrictions,  if  any,  as  may  be  set  forth  in  the 
charter  or  in  the  by-laws  of  the  corporation.  The  board  of 
directors  shall,  by  resolution,  state  its  opinion  of  the  actual 


54 

value  of  any  consideratioii  other  than  money  for  which  it 
authorizes  shares  of  stock  without  iiar  value  or  securities 
convertible  into  shares  of  stock  without  par  value  to  be  is- 
sued, unless  such  value  shall  have  been  fixed  by  the  char- 
ter. 

For',  form  of  charter  authorization,   see  skeleton   form  of 
certificate  of  incorporation  in  Appendix. 
See  Section  35. 
For  definition  of  convertible  securities,   see  Section   35. 

1922,  ch.  309. 

35D^.  For  the  purposes  of  Sections  35  to  35D,  inclu- 
sive, of  this  Article,  the  consideration  for  which  stock  is 
issued  as  a  stock  dividend  shall  be  taken  to  be  the  capitali- 
zation thereby  of  surplus  or  net  profits  of  the  corporation, 
and  the  actual  value  of  such  consideration  shall  be  taken 
to  be  an  amount  equal  to  the  surplus  or  net  profits  thereby 
capitalized. 

1920,  ch.  545. 

35E.  There  shall  be  no  individual  liability  upon  any  sub- 
scriber to,  or  holder  of,  any  stock  of  any  corporation  of 
this  State,  beyond  his  obligation  to  the  corporation  or  its 
receiver,  trustee  or  other  person  winding  up  its  affairs,  to 
comply  with  the  terms  of  the  contract  of  subscription,  and 
any  and  all  stock  for  which  the  agreed  consideration  shall 
have  been  paid  or  delivered  shall  be  fully  paid  and  no/i-ns- 
sessable  stock  of  the  corporation ;  provided,  however,  tlia  t 
nothing  in  this  section  shall  be  taken  or  construed  as  liiiiit- 
ing  or  affecting  the  liability  of  stockholders  in  banking, 
safe  deposit,  trust  or  loan  corporations. 

See  Section  35. 

See  also  Sections  61,  62,  63,  66  and  notes. 

1920,  ch.  545. 

35F.  The  books  of  every  corporation  of  this  State  shall 
be  so  kept  as  to  show  at  all  times  what  money  or  other  con- 
sideration was  received  by  such  corporation  for  the  slock 
issued  by  it  and  the  nundwr  and  par  value  of  the  shares  of 
each  class  issued  for  the  same,  and  to  show  at  all  times 


55 

what  money  or  other  consideration  was  received  by  the  cor- 
poration for  convertible  securities  issued  by  it  and  tlie 
number  and  par  value  of  the  shares  of  each  class  of  stock 
into  which  such  securities  are  convertible. 

See  Section  35. 

Section  70  of  the  Code  of  1904  provided  that  when  stock 
was  issued  for  property,  "the  books  of  the  company  shall 
be  so  kept  as  to  show  at  all  times  fully  what  property  was 
received  for  the  said  stock,  at  what  value,  and  the  number 
of  shares  of  the  capital  stock  issued  for  the  same."  This 
provision  was  held  to  be  directory  and  compliance  there- 
with not  essential  to  the  validity  of  a  subscription  pay- 
able  in    property. — Weber  v.   Fickey    (18  79),    52    Md.    500. 

1920,  ch.  545. 

3G.  Any  officer  or  director  of  any  corporation  of  this 
State  knowingly  and  wilfully  authorizing  or  consenLing  to 
the  issuance  of  unauthorized  stock  of  such  corporation,  or 
knowingly  and  wilfully  authorizing  or  consenting  to  the 
issuance  of  stock  or  convertible  securities  of  such  corpora- 
tion except  in  conformity  with  the  provisions  of  law  appli- 
cable to  the  issuance  thereof,  or  knowingly  and  wilfully 
making  or  consenting  to  the  making  of  any  false  statement 
in  a  statement  in  respect  of  the  issuance  thereof  deliverfnl 
for  record  to  the  State  Tax  Commission,  or  in  the  entries 
in  respect  of  the  issuance  thereof  required  by  law  to  be 
made  in  the  books  of  the  corporation,  shall  be  guilty  of  a 
misdemeanor  and,  upon  conviction,  shall  be  fined  not  more 
than  five  thousand  dollars  or  imprisoned  for  not  more  Hian 
two  years,  or  both  fined  and  imprisoned,  in  the  disci'etion 
of  the  Court ;  provided,  however,  that  the  valuation  placed 
by  the  board  of  directors  or  the  incorporators,  as  the  case 
may  be,  upon  the  consideration  other  than  money,  for 
which  stock  and/or  convertible  securities  are  to  be  issued, 
and  the  judgment  of  the  board  of  directors  or  the  incor- 
porators, as  the  case  may  be,  as  to  the  propriety  of  the  ac- 
ceptance of  the  same  and  the  issuance  therefor  of  the 
agi'eed  amount  of  stock  and/or  convertible  securities  shall 
be  conclusive  for  all  purposes  in  the  absence  of  actual 
fraud. 


56 


See  Section  35. 

See  Section  35F  and  note. 

1922,  ch.  309. 

36A.  (1)  Any  corporation  of  this  KState  may  acfiuire 
!^-liares  of  its  own  stock  of  any  class  by  gift  or  bequest. 

(2)  Any  such  corporation  may  purchase  shares  of  its 
own  stock  of  any  class,  which  is  subject  to  redemption  at 
ihe  time  of  such  purchase,  at  not  exceeding  the  redemption 
price  thereof.  Any  of  such  stock  purchased  for  retirement 
and  any  of  such  stock  redeemed  shall  have  the  staius  of 
authorized  but  unissued  stock  of  the  corporation  and,  until 
the  classification  thereof  shall  have  been  changed,  shall  re- 
tain the  classification  obtaining  before  such  purchase  for 
retirement  or  such  redemption.  No  proceeding  for  the  re- 
duction of  the  issued  stock  of  the  corporation  shall  be  nec- 
essary to  effectuate  such  retirement.  For  the  purposes  of 
the  succeeding  paragraphs  of  this  section  every  jDurchase 
for  retirement  of  shares  of  stock  subject  to  redemption 
shall  be  deemed  and  taken  to  be  a  redemption  thereof  and 
the  term  "purchase"  whenever  used  therein  shall  be  con- 
strued not  to  include  either  any  purchase  for  retirement  of 
shares  of  stock  subject  to  redemption  or  any  redemption 
thereof. 

(3)  Any  such  corporation  thereunto  authorized  by  its 
charter  or  by  the  vote  at  a  meeting  duly  called  and  held  of 
the  holders  of  two-thirds  of  the  shares  of  each  class  of  stock 
outstanding,  including  stock  of  any  class  to  whicli  the 
charter  purports  to  deny  the  right  to  vote,  may  purchase 
shares  of  its  own  stock  of  any  class.  The  holders  of  stock 
f/f  any  class  to  which  the  charter  of  the  corporal/Ion  pur- 
ports to  deny  the  right  to  vote  shall  be  entitled  {<•  vote  upon 
the  adoption  of  any  amendment  to  such  charter  autliorizing 
sncli  coi-poration  to  purchase  shares  of  its  own  stock. 

(4)  Any  sliares  of  its  own  stock  acquired  by  gift  or  be- 
quest by  any  corporation  of  this  State  or  purchase  by  it  out 
of  its  surplus  or  net  profits  may  be  held  by  such  corpora- 


57 


tion  or  sold  or  otherwise  disposed  of  b^'  it  from  time  to 
time  for  its  corporate  purposes.  Any  such  shares  so  ac- 
quired may  be  retired  by  resolution  of  the  board  of  direc- 
tors and  if  retired  shall  have  the  status  of  authorized  but 
unissued  stock  of  the  corporation  and,  until  the  classifica- 
tion thereof  shall  have  been  changed,  shall  retain  the  classi- 
fication ol)taiuing-  before  such  retirement.  No  procedure 
for  the  reduction  of  the  issued  stock  of  the  corporation 
shall  be  necessary  to  effectuate  such  retirement. 

(5)  Any  shares  of  its  own  stock  purchased  by  any  such 
corporation,  except  when  purchased  out  of  its  surplus  or 
net  profits,  shall  be  retired  by  reduction  of  the  amount  of 
issued  stock  of  the  corporation  in  the  manner  provided  by 
law.  In  such  case  the  articles  of  amendment  reducing  the 
amount  of  issued  stock  of  the  corporation  shall,  in  addi- 
tion to  other  matters  required  by  law,  set  forth  the  aggre- 
gate price  paid  or  to  be  paid  by  the  corporation  for  the 
shares  of  stock  thereby  retired. 

(6)  The  acquisition  of  its  own  stock  by  any  such  cor- 
poration, by  gift,  bequest  or  purchase,  shall  not  release  the 
liability  to  the  corporation,  or  to  its  receiver,  trustee  or 
other  person  winding  up  its  affairs,  of  any  stockholders 
whose  shares  have  not  been  fully  paid,  for  the  payment  of 
its  liabilities  existing  at  the  time  of  such  acquisition  or 
created  prior  to  the  retirement  of  the  stock  so  acquired  by 
reduction  of  the  amount  of  issued  stock  of  the  corporation 
in  the  manner  provided  by  law.  In  the  case  of  the  pur- 
chase of  its  own  stock  by  a  corporation,  except  when  pur- 
chased out  of  its  surplus  or  net  profits,  the  stockholders 
selling  their  stock  to  the  corporation  shall  be  and  remain 
liable  to  the  corporation,  or  to  its  receiver,  trustee  or  other 
person  winding  up  its  affairs,  to  the  extent  of  the  payments 
made  to  them  therefor,  for  the  payment  of  the  liabilities  of 
the  corporation  existing  at  the  time  of  such  payments  or 
created  prior  to  the  retirement  of  the  stock  acquired  from 
them  by  reduction  of  the  amount  of  issued  stock  of  the  cor- 
poration, in  the  manner  j)rovided  by  law. 


58 

(7)  No  corporation  of  this  State  shall  purchase  or  re- 
deem shares  of  its  own  stock  for  any  unlawful  purpose 
whatsoever,  or  purchase  or  redeem  shares  of  its  own  stock 
when  the  probable  effect  of  such  purchase  or  redemption 
would  be  to  prejudice  the  rights  of  existing  creditors. 

(8)  Nothing  in  this  section  shall  be  taken  or  construed 
as  limiting  or  affecting  the  liability  of  stockholders  in  bank- 
ing, safe  deposit,  trust  or  loan  corporations. 

As  to  right  of  corporation  to  vote  its  own  stock,  see  Sec- 
tion 18. 

In  the  absence  of  statutory  authority,  a  corporation  has 
no  power  to  purchase  its  own  stock. — Peninsula  Trust  Co. 
V.  Johnson  (1916),  128  Md.  535,  97  Atl.  525. 

37.  (Repealed  by  Chapter  596  of  the  Acts  of  1916,  Sec- 
tion 11.) 


ARTICLE  XXXII-A. 

Fraudulen t  Promotions. 

1920,  ch.  552. 

11.  If  it  shall  appear  to  the  Attorney  General  of  the 
State  of  Maryland  that  in  the  issuance,  sale,  promotion, 
negotiation,  advertisement  of,  or  distribution  of  any  stocks, 
bonds,  notes  or  other  securities  within  the  State  of  Mary- 
land, any  person,  partnership  or  corporation  is  employing 
or  is  about  to  employ  any  device,  scheme  or  artifice  to  de- 
fraud, or  for  obtaining  money  or  property  by  means  of  any 
false  or  fraudulent  pretense,  representation  or  i>romise,  or 
the  said  Attorney  General  believes  it  to  be  in  the  interest  of 
tlie  public  that  an  investigation  be  made  w^ith  a  view  to  the 
issuance  of  an  order,  such  as  herein  provided,  he  may  re- 
quire such  person,  partnership  or  corporation  to  file  Avith 
him  a  statement  in  writing  under  oath  as  to  all  facts  con- 
cerning the  same,  and  for  that  purpose  may  prescribe  forms 
upon  whicli  such  statements  shall  be  made.  The  Attorney 
(ieneral  may  re<iuire,  in  addition  thereto,  such  further  data 
and  information  as  he  may  deem  relevant  and  make  such 


59 

special  investigation  as  may  be  necessary,  and  for  the  pur- 
pose of  this  Act  the  Attorney  General,  or  an  Assistant  At- 
torney General  duly  authorized  by  him,  shall  have  power 
to  require  by  subpoena  or  summons,  the  attendance  and 
testimony  of  witnesses  and  the  production  of  any  books, 
accounts,  records,  papers  and  correspondence  relating  to 
any  matter  whicli  the  Attorney  General  is  authorized  by 
this  Act  to  consider  or  investigate.  The  Attorney  General, 
or  his  duly  authorized  assistant,  may  sign  subpoenas,  ad- 
minister oaths  and  affirmations,  examine  witnesses,  and  re- 
ceive evide'nce.  In  case  of  disobedience  to  a  subpoena  or  of 
the  contunmcy  of  any  witness  appearing  before  the  Attor- 
ney General  or  his  duly  authorized  Assistant  Attorney 
General,  the  Attorney  General  may  invoke  the  aid  of  the 
Circuit  Court  of  any  of  the  counties  of  the  State  of  Mary- 
land, or  of  the  Su])eri<)r  Court  of  Baltimore  City,  Such 
court  may  thereupon  issue  an  order  requiring  the  person 
subpoenaed  to  obey  the  subpoena  or  to  give  evidence  or 
produce  l)Ooks,  accounts,  records,  papers  and  correspond- 
ence touching  the  matter  in  question.  Any  failure  to  obey 
such  order  of  the  Court  may  be  punished  by  such  Court  as 
a  contempt  thereof.  In  the  case  of  a  failure  or  refusal  of 
any  person,  partnership  or  corporation  concerned  in  the 
issuance,  sale,  oifer  for  sale,  promotion,  advertisement  or 
distribution  of  any  stocks,  bonds,  notes  or  other  securities 
Avithin  the  State  of  Maryland,  to  file  any  statement  or  to 
furnish  any  information,  books,  papers,  or  records  required 
by  the  Attorney  General  or  his  duly  authorized  assistant, 
to  be  filed  or  furnished  in  connection  with  such  investiga- 
tion under  this  Act,  the  Attorney  General  may  issue  his 
order  under  Section  12  of  this  Act. 

1920,  ch.  552. 

12.  The  Attorney  General  may,  upon  evidence  satisfac- 
tory to  him,  that  in  the  issue,  sale,  promotion,  negotiation^ 
advertisement  of  or  distribution  of  any  stock,  bonds,  notes 
or  other  securities  within  the  State  of  Maryland,  any  per- 
son, partnership  or  corporation  is  employing  or  is  about  to 


60 

taining  money  or  property  by  means  of  any  false  or  fraudu- 
lent pretense,  representation  or  promise,  issue  and  cause 
to  be  served  upon  such  person,  partnership  or  corporation 
an  order  requiring-  the  party  guilty  thereof  to  cease  and 
desist  therefrom.  If  it  shall  appear  to  the  Attorney  Gen- 
eral that  an  irreparable  public  injury  is  imminent,  unless 
such  order  is  issued  before  a  full  investigation  can  be  made 
pending  sucli  investigation,  he  may  issue  such  order,  but 
the  same  shall  be  accompanied  with  a  request  for  infor- 
mation as  to  the  facts  relied  on  in  issuing  the  order,  and 
such  temporary  order  shall  only  remain  in  force  until  such 
information  is  furnished  and  two  days  thereafter.  Orders 
of  the  Attorney  General  under  this  section  may  be  served 
by  anyone  duly  authorized  by  the  Attorney  General  either 
(a)  by  delivering  a  copy  thereof  to  the  person  to  be  served; 
or  to  a  member  of  the  partnership  to  be  served,  or  to  the 
president,  vice-president,  secretary  or  other  executive  of- 
ficer or  director  of  the  corporation  to  be  served;  o^:  (b)  b.v 
leaving  a  copy  thereof  at  the  principal  office  or  place  of 
business  of  such  person,  partnership  or  corporation  ;  or  (c) 
by  registering  and  mailing  a  copy  thereof,  addressed  to 
such  person,  ijartnership  or  corporation  at  his  or  its  princi- 
pal office  or  place  of  business.  A  verified  return  by  the  per- 
son so  serving  said  order,  setting  forth  the  manner  of  said 
service,  shall  be  prima  facie  proof  of  the  same,  and  the  re- 
turn postoffice  receipt  for  said  order  registered  and  mailed 
as  aforesaid  shall  be  prima  facie  proof  of  the  service  of  the 
same,  as  aforesaid. 

13.  Any  person,  partnership  or  corporation  affected  or 
aggrieved  by  tlie  order  of  tlie  Attorney  General  under  Sec- 
tion 12  shall  be  entitled  to  a  hearing  de  novo  before  the 
Circuit  Court  of  the  county  in  which  said  person,  partner- 
sliip  or  corporation  has  performed  or  is  alleged  to  have 
performed  the  acts  referred  to  in  said  order  of  the  Attorney 
Genei-al,  or  in  tlie  Superior  Court  of  Baltimore  City,  if  said 
acts  or  alleged  acts  occurred  in  Baltimore  City,  or,  at  the 
option  of  said  person,  partnership  or  corporation,  said  pro- 
ceeding  for  a  hearing  de  novo  may  be  filed  in  the  Circuit 


61 

Court  for  the  county  in  wliicli  said  persou,  partuersliip  or 
corporation  resides,  or  has  its  principal  oiflce  within  the 
State  of  ^fiirThind,  or  in  the  Superior  Court  of  Baltimore 
City,  if  such  residence  or  office  is  in  Baltimore  City.  And 
in  such  proceeding  any  such  person,  partnership  or  cor- 
poration sliall  be  entitled  to  have  any  issues  of  fact  arising 
therein  determined  by  a  jury,  provided  AATitten  demand  is 
filed  at  the  time  of  the  institution  of  said  proceeding.  The 
court  shall  have  power  during  tlie  pendency  of  the  proceed- 
ing before  it,  to  suspend  or  modify  the  order  of  the  Attor- 
ney ( Jeneral  and  to  enter  an  appropriate  judgment  or  order 
at  the  conclusion  of  such  hearing  to  modify,  affirm  or  set 
aside  order.  From  the  final  order  or  judgment  of  the  said 
court,  either  party  to  said  proceeding  may  appeal  to  the 
Court  of  Appeals  of  Maryland,  as  in  other  cases  or  suits  at 
law,  arising  in  said  court;  and,  in  case  of  such  appeal,  the 
testimony  adduced  before  the  c(mrt  shall  be  presented  to 
the  Court  of  Appeals  by  bills*  of  exception  in  customary 
form,  as  in  other  law  cases,  and  the  Court  of  Appeals  may 
review  the  questions  of  law  arising  on  said  appeal  as  in 
other  appeals  from  courts  of  law  and  in  ordinary  course. 

1920,  ch.  552. 

14.  Any  person,  partnership  or  corporation  having  been 
served  Avith  any  order  of  the  Attorney  General  under  Sec- 
tion 12  of  this  Act,  or  having  knowledge  of  the  issuance  of 
said  order  and  while  said  order  remains  in  effect,  either  as 
originally  issued  or  as  modified,  who  or  which  shall  execute 
or  carry  on  in  any  manner  any  scheme  or  device  against 
which  said  order  has  been  issued,  or  wilfully  attempts  so 
to  do,  or  shall  sell  or  deliver  or  receive  payment  in  money 
or  property  for  any  paper,  certificate  or  instrument  pur- 
porting to  be  or  represent  any  interest  in  or  order  for 
stocks,  bonds,  notes  or  other  securities  mentioned  in  said 
order  of  the  Attorney  General,  or  shall  publish  or  cause  to 
be  published  any  advertisement  of  any  such  stocks,  bonds, 
notes  or  other  securities  pursuant  to  said  scheme  or  device 
against  which  said  order  has  been  issued,  shall  be  guilty 
of  a  Tiiisdpmpanor  and.  uDon  conviction,  shall  be  fined  not 


62 

more  than  ten  tliousand  dollars  (|10,000)  or  imprisoned 
not  more  than  Uvo  years,  or  be  subject  to  both  fine  and  im- 
prisonment, in  the  discretion  of  the  court. 

Section  14  8  of  Article  27  makes  it  a  misdemeanor  for 
an  officer  or  agent  of  a  corporation  to  sign  or  assent  to  any 
publication  containing  untruthful  representation  of  its 
affairs  with  a  view  to  affecting  the  market  value  of  its 
shares  or  obligations,  or  to  accomplishing  any  fraudulent 
purposes.     Severe  penalties  are  imposed. 


ARTICLE   XLV. 

Husband  and  Wife. 

8.  Wife  may  insure  life  of  husband  for  her  sole  use. 
Husband  may  insure  his  life  for  wife's  sole  use.  Such  insur- 
ance free  from  all  claims  against  husband. 

9.  Beneficiary  shall  receive  insurance  free  from  claims 
against  husband. 

10.  How  payable  if  wife  dies  before  husband. 

1904,  art.  45,  sec.  8.     1888,  art.  45,  sec.  8.     1862,  ch.  9. 
1868,  ch.  471,  sec.  101.     1898,  ch.  457. 

8.  Any  married  woman,  by  herself  and  in  her  name,  or 
in  the  name  of  any  third  person,  with  his  assent,  as  her 
trustee,  may  insure  or  cause  to  be  insured  for  her  sole  use 
the  life  of  her  husband  for  any  definite  period,  or  for  the 
term  of  his  natural  life;  and  any  husband  may  cau§e  his 
own  life  to  be  insured  for  the  sole  use  of  his  wife  and  may 
also  assign  any  policy  of  insurance  upon  his  own  life  to 
his  wife  for  lier  sole  use;  and  in  case  of  the  Avife  surviving 
her  husband,  the  sum  or  net  amount  of  such  insurance  be- 
coming due  and  payable  by  the  terms  of  the  insurance  shall 
be  payable  to  her  for  her  own  use,  free  from  the  claims  of 
the  representatives  of  her  husband  or  any  of  his  creditors. 

An  assignment  by  husband  and  wife  of  insurance  payable  to 
the  wife  may  be  made  notwithstanding  this  section. — Einer- 
ick  V.  Coakley,  35  Md.  190. 

This  section,  in  connection  with  section  9,  makes  it  clear 
that  a  voluntary  assignment  of  a  policy  by  a  man  to  his  wife 
or  children  is  free  from  all  claims  of  creditors. — Earnsliaw 


63 


Purposes  of  this  section.  Its  application  is  not  restricted 
to  husbands  who  are  able  to  pay  their  debts. — Elliott  v. 
Bryan,   64    Md.   370. 

A  married  woman  may  sue  in  her  own  name  for  insurance 
under  this  section.  Contract  for  insurance  held  to  have  been 
made  with  husband  and  wife. — Mutual  Life  Ins.  Co.  v.  Stibbe, 
46  Md.  312. 

See  article  23,  section  158,  and  article  83,  section  8. 

1904,  art.  45,  sec.  9.  1888,  art.  45,  sec.  9.  1878,  ch.  200. 
1898,  ch.  457. 

0.  All  policies  of  life  insurance  upon  the  life  of  any  per- 
son which  may  hereafter  mature,  and  which  have  been  or 
shall  be  taken  out  for  the  benefit  of  or  hona  fide  assigned 
to  the  wife  or  cliildren  of  any  relative  dependent  upon  such 
person  or  any  creditor,  shall  be  vested  in  such  wife  or 
cliildren  or  other  relative  or  creditor,  free  and  clear  from 
ail  claims  of  the  creditors  of  such  insured  person. 

This  section,  in  connection  with  section  8,  makes  it  clear 
that  a  voluntary  assignment  of  a  policy  by  a  man  to  his  wife 
or  children  is  free  from  all  claims  of  creditors.  The  words 
"bona  fide"  as  here  used,  construed. — Earnshaw  v.  Stewart, 
64  Md.  514. 

This  section  does  not  amend  or  restrict  section  8.  It  is  an 
enabling,  and  not  a  restraining  statute. — Elliott  v.  Bryan, 
64    Md.    371. 

See  article  83,  section  8. 

1904,  art.  45,  sec.  10.  1888,  art.  45,  sec.  10.  1840,  ch.  212, 
sec.  2.  1868,  ch.  471,  sec.  101.  1898,  ch.  457. 

10.  If  the  wife  shall  die  before  her  husband  the  amount 
of  such  insurance  may  be  payable  after  her  death  to  the 
children  or  descendants  for  their  use,  and  to  their  guard- 
ian, if  under  age,  and  if  there  be  no  children  or  descend- 
ants of  the  wife  living  at  the  time  of  her  death,  to  her  legal 
representatives. 

An  assignment  by  husband  and  wife  of  insurance  payable 
to  the  wife  may  be  made  notwithstanding  this  section. — 
Enierick  v.  Coakley,    35   Md.,   109. 


r 


64 

ARTICLE  LXXV. 

Pleadings,  Practice,  and  Process  at  Law. 

1904,  art.  75,  sec.  23.     1896,  ch.  367,  sec.  22-A.    1902,  ch.  449. 

23.  Whenever  any  insurance  company  or  surety  or  bond- 
ing company  of  any  kind  whatsoever  shall  have  a  duly  ac- 
credited agent  in  any  county  or  city  of  this  State  resident 
therein  and  shall  become  obligated  by  its  policy  or  other 
contract,  express  or  imi^lied,  to  any  resident  of  any  such 
county  or  city,  the  said  company  may  sue  or  be  sued  on 
such  policies  as  other  contracts  in  the  same  manner  as  if 
resident  in  such  city  or  county,  by  causing  process  to  be 
served  on  such  resident  agent,  which  shall  be  as  etfective 
in  law  and  equity  as  is  such  service  had  been  made  on  the 
president,  director  or  directors,  of  such  company,  and  the 
judgment  rendered  in  such  case  shall  have  the  same  force 
and  effect  as  other  judgments  would  or  could  have. 

Process  served  upon  the  local  agent  of  ran  insurance  com- 
pany upheld  under  this  section;  that  such  agent  does  not 
notify  the  company  is  immaterial. — Gerard  Ins.  Co.  v.  Baiik- 
ard,  107  Md.  540. 

Although  process  was  served  on  the  secretary  of  the  com- 
pany instead  of  as  required  by  the  Act  of  1896,  chapter  367. 
the  court  was  not  thereby  deprived  of  jurisdiction,  since  such 
an  infirmity  must  be  taken  advantage  of  by  motion  to  quash 
the  summons.  The  Act  of  1896,  chapter  367,  construed. 
— Henderson  v.  Home  Ins.  Co.,  90   Md.   51. 

As  to  process  against  corporations,  see  article  23,  sections 
87  and  92.  As^  to  process  against  foreign  insurance  com- 
panies, see  article  23,  section   182. 


ARTICLE  LXXXIII. 

Sales  and  Notices. 
Exemption  from  Execution. 

1904,  art.  83,  sec.  8.  1888,  art.  83,  sec.  8.  1861,  ch.  7, 
sec.  1.  1904,  ch.  381. 

8.  One  hundred  dollars  in  property,  whether  the  same 
consists  of  money,  land  or  goods  of  every  defendant,  as 
well  as  all  money  payable  in  the  nature  of  insurance,  bene- 


65 

fit  or  relief  in  tlie  contingency  or  event  of  sickness,  acci- 
dent, Inirt  or  death  of  any  person,  sball  he  exempt  from 
execution  or  seizure  in  satisfaction  of  debt  or  claim  upon 
any  judoment  in  any  ciA'il  proceedings,  except  on  judg- 
ments for  breach  of  promise  to  marry  or  for  seduction. 

As  to  the  exemption  of  the  proceeds  of  insurance  policies 
from  execution  or  attachment,  see  article  45,  section  8,  et  seq. 


ARTICLE  XXVII. 

rRiMES  AND  Punishments. 

EmhezzUng  Property  and  Writings. 

1904,  art.  27,  sec.  103-A.     1910,  ch.  477. 

113.  If  an  insurance  agent,  solicitor  or  broker  who  acts 
in  negotiating  a  contract  of  insurance  by  an  insurance 
company  lawfully  doing  business  in  this  State,  and  who 
end)ezzles  or  fraudulently  converts  to  his  own  use,  or,  with 
intent  to  use  or  embezzle  takes,  secreets,  lends,  invests  or 
otherwise  uses  or  applies  any  money  or  substitutes  for 
money  receiAed  by  him  as  such  agent,  solicitor  or  broker 
contrary  to  the  instructions  or  without  the  consent  of  the 
company  for  or  on  account  of  which  the  same  was  received 
by  him,  he  shall  be  guilty  of  a  misdemeanor,  and,  on  con- 
viction thereof,  shall  be  sentenced  to  the  jail  or  peniten- 
tiary for  not  more  than  three  years  in  the  discretion  of  the 
court. 

Fraud — Insurance  Companies^  by  Directors  or  Officers  of. 

1904,  art.  27,  sec.  145.     1898,  ch.  320. 

162.  Any  director  or  officer  of  any  insurance  company, 
or  association,  or  fraternal  beneficiary  association,  who 
shall  receive  any  premium  or  assessment  on  behalf  of  said 
company,  association,  or  fraternal  beneficiary  association, 
knowing  at  the  tim.e  of  the  receipt  of  said  premium  or  as- 
sessment, said  company,  association  or  fraternal  benefic- 
iary association  to  be  insoh^eut,  shall  be  deemed  guilty  of 
a   misdemeanor,   and,   upon    conviction   thereof,   shall   be 


66 


liable  to  a  flue  not  exeeeding  five  hundred  dollars,  or  im-    ^ 
prisonment  in  jail  for  a  period  not  exceeding  six  months, 
or  both,  in  the  discretion  of  the  court. 


67 


Laws  of  Maryland  Relating  to  Insurance 
and  Insurance  Companies. 

Section  1.  lie  it  enacted  hij  the  General  Assemhhj  of 
Marf/hnul,  That  Sectioii.s  152  to  2^^'S,  both  inclusive,  and 
Sections  378,  379,  380  and  381  of  Article  23  of  Bajiby's 
Annotated  Code  of  Public  General  Laws  of  ^Maryland,  as 
amended  by  subsequent  Acts  of  the  General  Assembly  of 
Maryland,  title  "Corporations,"  sub-titles  "Insurance  Com- 
panies," "Insurance  Department,"  "Insurance  Broker," 
"Fire  Marshal,"  "Fraternal  Beneficiary  Associations"  and 
"Trust,  Surety  and  Fidelity  Companies,"  and  all  such  pro- 
visions or  i)arts  of  Sections  106  to  119,  both  inclusive,  of 
said  Article  23,  title  "Corporations,"  sub-title  "General 
Provisions,"  as  refer  or  relate  to  ouaranty,  fidelity,  surety, 
casualty  or  other  insurance  companies,  or  the  business  of 
insurance,  be,  and  the  same  are  hereby  repealed;  and  that 
in  lieu  of  said  sections  and  provisions  or  parts  of  sections 
repealed  as  aforesaid,  the  following  one  hundred  and  seA^en- 
t3'-eight  new  sections,  to  be  numbered  from  2  to  179,  both 
inclusive,  be,  and  the  same  are  hereby  enacted,  to  form  and 
embra<  e  a  new  Article  of  the  Code  of  Public  General  Laws 
of  Maryland,  to  follow  immediately  after  Article  No.  48, 
to  be  numbered  and  called  Article  Number  48-ii,  entitled 
"Insurance,"  and  grouped  or  arranged  under  the  following 
sub-titles,  to  wit:  "Insurance  Department,"  "General  Pro- 
visions," "Fire  Investigation  Bureau,"  "Agents  and  Brok- 
ers," "Fire  Insurance,"  "Lloyd's  Insurance,"  "Life, 
Health  and  Accident  Insurance,"  "Surety,  Casualty,  Lia- 
bility and  Compensation  Insurance,"  "Mutual  Insurance 
Companies,"  "Eeciprocal  Exchanges  and  Inter-Insurers" 
and  "Fraternal  Beneficiary  Associations,"  said  new"  sec- 
tions to  be  numbered  and  to  read  as  follows: 

ARTICLE  XLVIII-A  INSURANCE. 

Sectiox  2.  Definitions.  In  this  Article,  unless  the  con- 
text other  requires, 


"Company'"  means  an  insurance  company,  and  includes 
all  corporations,  associations,  partnerships  or  individuals 
engajied  as  principals  in  the  business  of  insurance; 

"•Insurance  business,"  or  "business  of  insurance," 
means  and  embraces,  among  other  things,  the  making,  ne- 
gotiating or  soliciting  of  any  contract  of  insurance  or  re- 
insurance, including  the  guaranty  or  insurance  of  the  title 
to  real  or  personal  property,  and  the  principal  or  interest 
secured  by  any  mortgage;  the  issuing  of  any  bond  insuring 
the  fidelity  of  any  person,  the  performance  of  any  contract, 
act,  trust  or  thing;  and  any  obligation  or  undertaking  of 
any  kind  or  nature  whatsoever  insuring  against  or  under- 
taking to  indemnify  any  person  for  loss  resulting  from  any 
contingency,  hazard  or  casualty;  "State,''  includes  the  Dis- 
trict of  Columbia,  the  territories  and  dependencies  of  the 
United  States  of  America,  the  provinces  of  the  Dominion 
of  Canada  and  all  foreign  countries; 

"Domestic  Company"  means  an  insurance  company  in- 
corporated under  the  general  laws  of  the  State  of  Mary- 
land, or  by  special  act  of  the  Maryland  Legislature ; 

"Foreign  Company''  means  an  insurance  company  in- 
corporated, formed  or  organized  elsewhere  or  under  laws 
other  than  the  laws  of  the  State  of  Maryland ; 

"Commissioner''  or  "Insurance  Commissioner"  means 
tlie  State  Insurance  Commissioner  of  Maryland. 

"Department"  or  "Insurance  Department"  means  State 
Insurance  Department  of  Maryland. 

"Person"  includes  individuals,  corporations,  associa- 
tions and  partnerships; 

Personal  pronouns  embrace  all  genders; 

The  singular  number  includes  the  x>lural,  and  the  plural 
includes  the  singular. 

/ iisKraiicc  Dcjxni iiK'iit. 

Sec.  3.  Tide  aiul  Jia-mUction.  There  shall  be  a  Depart- 
ment, to  be  known  as  the  State  Insurance  Department  of 
Maryland,  which  shall  be  assigned  to  the  Division  of  Fi- 
nancial hVview  and  Control,  and  which  shall  be  charged. 


69 


subjet-t  to  the  .snjiervision  and  direction  of  the  Comptroller, 
Avith  the  execution  of  the  laws  of  this  State  in  relation  to 
insurance.  The  principal  office  of  said  Department  shall 
be  located  in  tlie  City  of  Baltimore. 

Sec.  4.  Insurance  Commissioner;  Appointment  and 
Term.  The  chief  officer  of  said  Department  shall  be  ap- 
pointed by  the  Governor  for  a  term  of  fonr  years  beginning 
on  the  first  Monday  of  May  succeeding  his  appointment, 
except  that  the  Insurance  Commissioner  first  appointed 
under  this  Act,  shall  be  appointed  on  the  first  day  of  Jan- 
uary, 1923,  on  Avhich  date  his  term  shall  begin,  and  shall 
hold  office  until  the  first  Monday  of  May,  1924,  or  until  his 
successor  shall  be  appointed  and  shall  qualify. 

Sec.  5.  Qualifications;  Compensation;  Bond.  No  per- 
son who  is  a  director,  officer  or  agent  of,  or  directly  or  in- 
directly interested  in  any  insurance  company,  except  as  an 
assured,  shall  be  eligible  for  appointment  as  commissioner. 
He  shall  give  bond  to  the  State  of  Maryland  in  the  penalty 
of  fifty  thousand  dollars  for  tlie  faithful  performance  of  the 
duties  of  his  office,  and  sliall  receive  an  annual  compensa- 
tion as  fixed  and  provided  by  the  budget. 

Sec.  6.  Dcptittj  Insurance  Conunissioner.  There  shall 
also  be  a  Deputy  Insurance  Commissi(mer,  who  shall  be 
apjjointed  by  the  commissioner,  and  who,  in  the  event  of 
the  death,  resignation,  disability  or  disqualification  of  the 
commissioner,  or  in  case  the  office  of  commissioner  shall 
for  any  cause  become  vacant,  shall  have  and  exercise  all 
the  powers  and  duties  vested  by  law  in  the  commissioner. 
He  shall  give  bond  to  the  commissioner  in  such  penalty  as 
shall  be  determined  by  the  commissioner,  and  shall  receive 
an  annual  compensation  as  fixed  and  provided  by  the  bud- 
get. 

Sec.  7.  Examiner.  There  shall  be  an  examiner  of  the  in- 
surance department,  who  shall  be  appointed  by  the  com- 
missioner and  whose  duty  it  sliall  be  to  examine,  under  the 
direction  of  the  commissioner,  the  condition  and  affairs  of 
every  insurance  company  of  this  State  and  such  other  com- 


70 

panies  doiDg  business  in  this  State  as  the  commissioner 
may  direct,  in  order  tliat  the  commissioner  may  know 
whetlier  or  not  such  companies  are  solvent  and  in  com- 
pliance with  the  laws  of  this  State.  Said  examiner  shall 
receive  an  annual  compensation  not  exceeding  fifteen  hun- 
dred dollars  and  the  per  diem  provided  by  Section  50,  to 
be  paid  by  the  companies  examined  by  him. 

Sec.  8.  Actuary.  The  commissioner  shall  also  appoint  an 
actuary  for  the  department,  who  shall  receive  an  annual 
compensation  of  five  hundred  dollars  and  the  fees  provided 
by  Section  40,  to  be  paid  by  the  companies  whose  policies 
he  shall  value  as  required  by  law. 

Sec.  9.  Auditor.  The  commissioner  shall  also  appoint  an 
auditor  for  the  department,  whose  duties  it  shall  be  to  ex- 
amine and  audit  the  annual  statements  of  all  insurance 
companies  authorized  to  do  business  in  this  State,  the 
books,  accounts  and  affairs  of  the  insurance  department, 
and  do  such  other  auditing  as  the  commissioner  may  direct. 
He  shall  also,  when  so  directed  by  the  commissioner,  assist 
in  the  examination  of  companies,  and  shall  receive  tlie  an- 
nual compensation  of  one  thousand  dollars,  and  when  en- 
gaged in  the  examination  of  companies,  the  per  diem 
provided  by  Section  50,  to  be  paid  by  the  companies  ex- 
amined by  him. 

Sec.  10.  CJcrl-s.  The  commissioner  nuiy  also  employ  such 
clerks  and  assistants  as  may  be  necessary  for  tlie  jDroper 
discharge  of  the  duties  of  his  department,  at  such  compen- 
sation as  shall  be  fixed  and  provided  by  the  budget. 

Sec.  11.  (iciicra]  Poircis  and  Duties  of  Commissioner. 
It  shall  be  tlie  duty  of  the  commissioner  to  see  that  all  the 
laws  of  this  State  governing  insurance  companies  or  relat- 
ing to  the  business  of  insurance  are  faithfully  executed.  He 
shall  keep  on  file  in  his  office  duly  certified  copies  of  the 
charter,  declaration  of  organization  or  deed  of  settlement 
of  every  insurance  company  authorized  to  do  business  in 
this  State,  and  all  other  certificates  and  documents  re- 
quired by  this  Article  to  be  filed  with  him,  and  shall  furnish 


71 

any  «iK-h  i-ominuiy  api>lYiiio-  therefor,  certified  copies  of 
said  documeuts  filed  in  Lis  department.  He  shall  furnish 
in  December  of  each  year  to  the  companies  required  by  this 
Article  to  report  to  him,  the  necessary  blank  forms  for  the 
statements  required,  and  shall  carry  out,  fulfill  and  enforce 
all  the  provisions  of  this  Article  with  reference  to  the 
supervision  and  reg^ulation  of  insurance  companies  and  the 
business  of  insurance.  It  shall  be  his  duty  to  report  in  de- 
tail to  the  Attorney  General  any  violations  of  the  laws  rel- 
ative to  insurance  companies  or  the  business  of  insurance, 
and  he  shall  have  power  to  institute  suits  and  prosecutions, 
cither  by  the  Attorney  General  or  such  other  attorney  as 
the  Attorney  General  may  select,  for  any  violation  of  the 
provisions  of  this  Article.  The  commissioner  is  a  neces- 
sary party  to  any  proceedings  instituted  for  the  purpose  of 
closing  up  the  affairs  of  any  company',  when  the  same  shall 
not  be  in  the  name  of  the  State  of  Maryland.  The  couimis- 
sioner  and  the  deputy  commissioner  shall  have  the  power 
to  administer  oaths  to  all  witnesses  who  appear  before 
them,  or  either  of  them,  in  connection  with  any  examina- 
tion, investigation  or  hearing,  and  also  to  require  agents 
•ind  broker:?  to  prodii.e  any  booi^s,  policu  "^  or  jKii'ers  in 
their  ]>ossession  that  may  be  needed  in  connection  with  any 
liearing,  examination  or  investigation  of  such  agents  or 
brokers. 

Sec,  12.  Annual  Report  to  Governor.  The  commissioner 
shall  preserve  in  permanent  form  a  full  record  of  his  pro- 
ceedings, and  a  concise  statement  of  the  condition  of  each 
company  visited  or  examined,  and  report  annually  to  the 
Governor,on  or  before  the  first  day  of  June,  his  official  acts. 
In  his  report  to  the  Governor  he  shall  report  the  condition 
of  the  companies  doing  business  in  this  State,  and  such 
other  information  as  will  exhibit  the  affairs  of  his  depart- 
ment; a  copy  of  which  said  report  to  the  Governor  he  shall 
forward  to  the  Insurance  Commissioner  or  other  similar 
officer  of  every  other  State  of  the  United  States,  and  to  each 
company  doing  business  in  this  State;  and  on  request  he 
shall  communicate  to  the  Insurance  Commissioner,  or  other 


proper  officer  of  any  other  State,  any  facts  which  by  law  i* 
is  his  duty  to  ascertain  respecting  companies  of  this  State 
doing  business  within  such  other  State,  and  at  the  request 
of  any  i)erson,  and  on  payment  of  the  proper  fee,  as  herein- 
after provided,  he  shall  give  certified  copies  of  any  record 
or  paper  in  his  office  when  he  deems  it  not  prejudicial  to 
the  public  interest  so  to  do,  and  he  shall  give  such  other 
certificates  as  this  Article  provides  for.  He  shall  adopt 
and  renew  from  time  to  time,  when  necessary,  with  the  ap- 
proval of  tlie  Governor,  a  seal  of  office,  an  impression  and 
description  of  wliich,  with  the  Governor's  certificate  of  ap- 
proval, shall  be  filed  with  the  Secretary  of  State. 

Sec.  13.  ^hall  Remit  Receipts  of  Office  Quarterli/.  The 
commissioner  shall,  on  the  thirty-first  day  of  December,  the 
thirty-first  day  of  March,  the  thirtieth  day  of  June  and  the 
thirtieth  day  of  September,  in  each  and  every  year,  report 
to  the  Comptroller  and  pay  in  to  the  state  treasury  all 
moneys  received  by  him  from  all  sources,  save  and  except 
the  moneys  received  by  him  as  the  fees  of  his  office,  which 
said  fees  received  and  expenses  of  his  department  for  the 
year  tlien  to  end,  lie  sliall  annually  on  the  first  day  of  De- 
cember, report  to  the  Comptroller,  and  pay  into  the  treas- 
ury all  excess  of  such  receipts  over  disbursements, 

Geii  era  J  Pro  r  i.sion  s. 

Sec.  14.  Formation  of  Iiisiir<iiice  Corporations.  Corpor- 
ations may  be  formed  under  the  provisions  of  Article  23  of 
the  Code  of  Public  General  Laws  for  insurance  purposes, 
and  may  be  formed  either  as  mutual  or  stock  companies,  or 
as  mutual  and  stock  companies  combined,  as  shall  be  de- 
termined and  declared  in  tlie  certificate  of  incorporation  of 
an^^  such  company. 

Sec.  15.  Powers  <in(/  Purposes.  Corporations  formed  for 
insurance  purposes  as  above,  shall  be  formed  under  and 
comply  with  all  the  jn'ovisions  of  Article  23,  so  far  as  ap- 
l>li cable,  i-elating  to  the  formation,  powers  vested  in  and 
obligations  imposed  upon  corporations  formed  under  the 


73 


provisions  of  said  Article,  except  as  otherwise  specifically 
provided  in  this  Article,  but  shall  in  all  other  respects  be 
subject  to  and  reiiulated  by  the  provisions  of  this  Article 
and  by  no  other  law,  act  or  part  of  act  now  in  force  or  that 
may  hereafter  be  passed,  unless  one  or  more  classes  of  cor- 
porations embraced  witliin  this  Article  shall  be  specifically 
mentioned  and  embraced  within  the  provisions  of  an}^  such 
Act  hereafter  i)assed. 

Sec.  1().  Ccrtificdfc  to  he  Approved  hjj  CoDunissioiwr  Be- 
fore Record'uuj.  The  certificate  of  incorporation  of  every 
corporation  formed  for  insurance  purposes,  or  any  amend- 
ment tliercof,  sliall  be  snbnntted  to  the  Insurance  Commis- 
sioner for  examination  and  by  him  endorsed  as  being  in 
accordance  Avitli  the  ])rovisions  of  this  Article  and  not  in- 
consistent with  tlie  hiws  and  Oonstitution  of  this  State, 
before  the  same  may  be  received  by  the  State  Tax  Commis- 
sion for  record,  and  no  such  certificate  or  amendment  shall 
be  operative  and  no  such  company  shall  be  granted  a  li- 
cense or  authority  to  do  an  insurance  business  until  all  the 
provisions  of  this  section  shall  have  been  complied  with. 

Sec.  it.  Chtsses  of  Business  That  Mai)  Be  Conihined. 
Any  company  incorporated  under  the  laws  of  this  State  for 
insurance  purposes  may  include  in  its  certificate  of  incor- 
poration any  two  or  more  classes  of  insurance  business  au- 
thorized by  this  Article,  except  as  herein  otherwise  pro- 
vided, and  may  also  include  the  following;  to  guarantee  the 
payment,  punctual  performance  and  collection  of  promis- 
sory notes,  bills  of  exchange,  contracts,  bonds,  accounts, 
claims,  rents,  annuities,  mortgages,  clioses  in  action,  evi- 
dences of  debt  and  certificates  of  property  or  value,  and  the 
titles  to  property,  real  or  personal,  on  such  terms  as  may  be 
established  by  the  board  of  directors  of  said  company ;  to 
receive  on  storage,  deposit  or  otherwise,  merchandise,  bul- 
lion, specie,  plate,  stock,  bonds,  promissory  notes,  certifi- 
cates and  evidences  of  debt,  contracts  or  other  property, 
and  to  take  the  management,  custody  and  charge  of  real  or 
personal  estate  or  property,  and  to  advance  money,  securi- 
ties and  credits  upon  any  property,  real,  personal  or  mixed,. 


74 

on  such  terms  and  with  all  such  powers  of  sale  and  other 
disposition  thereof  as  shall  be  established  by  the  charter  or 
by-laws  of  such  corporation ;  provided  that  the  corporate 
title  of  any  company  having  among  its  other  purposes  those 
numerated  in  this  section,  shall  designate  the  same  as  a 
security,  as  well  as  an  insurance  company;  and  provided, 
further,  that  no  company  incorporated  for  the  purpose  of 
insuring  the  lives  of  persons  may  include  in  its  certificate 
of  incorporation  any  other  class  of  business  than  the  insur- 
ance of  persons  against  disability  from  accident  or  sick- 
ness, and  any  insurance  appertaining  to  life,  insurance,  in- 
cluding endowments,  and  the  grant,  purchase  or  disposi- 
•tion  of  annuities. 

Sec.  18.  Capital  ^^t(jck.  The  caj)ital  stock  of  any  insur- 
ance company  incorporated  under  the  laws  of  this  State, 
except  companies  writing  fidelity  or  surety  bonds,  or  lia- 
bility, workmen's  compensation,  or  any  class  of  casualty 
insurance,  shall  not  exceed  the  sum  of  two  millions  of  dol- 
lars, and,  with  the  exception  of  mutual  insurance  com- 
panies and  industrial  life  insurance  companies  falling 
within  the  class  of  companies  embraced  within  the  provi- 
sions of  Sections  95,  96  and  97,  shall  not  be  less  than  one 
hundred  thousand  dollars,  or  in  the  case  of  companies  writ- 
ing fidelity  or  surety  bonds,  or  liability  and  Avorkmen's 
compensation  insurance,  shall  not  be  less  than  two  hun- 
dred and  fifty  thousand  dollars. 

Sec.  19.  Cancellation  and  Re-issue  of  Capital  Stock.  It 
shall  be  lawful  for  the  stockholders  of  any  insurance  com- 
pany, in  general  meeting  assembled,  from  time  to  time,  to 
provide  for  calling  in  and  cancelling  the  whole  or  any  part 
of  the  ca])ital  stock  and  issuing  other  stock  instead  there- 
of at  such  par  value  as  they  may  decide  on,  to  an  amount 
not  exceeding  the  true  value  of  such  stock,  in  such  manner 
as  to  provide  such  contingent  fund  or  surplus  not  repre- 
sented by  stock  as  they  may  decide  to  be  necessary;  provid- 
ed, that  notice  of  every  such  meeting  of  stockholders  shall 
be  given  in  the  manner  required  by  Sections  15  and  10  of 


75 

Article  23,  and  the  proceedings  thereafter  shall  be  similar 
to  those  prescribed  in  Sections  26  and  28  (both  inclusive) 
of  said  Article  23. 

Sec.  20.  Dcitosit  of  l^ccKritlc.s  hi/  Domestic  Companies. 
Every  domestic  company  writing  life,  health,  accident,  lia- 
bility, compensation  or  casualty  insurance,  or  fidelitj^  or 
surety  bonds,  except  industrial  life  insurance  companies 
embraced  within  the  provisions  of  Sections  95,  96  and  97, 
shall,  before  being  entitled  to  transact  any  business  of 
insurance,  assign  to  and  deposit  with  the  Treasurer  of  the 
iState  of  Maryland,  in  trust,  as  security  for  all  the  holders 
of  policies  or  other  obligations  of  said  company,  bonds, 
coin  or  treasury  notes  of  the  United  States  of  America, 
bonds  of  the  State  of  ^Maryland  or  of  any  county  or  munic- 
ipal corporation  of  this  State,  or  interest-paying  first 
mortgage  Ixmds  of  such  electric  railways  of  this  State,  or 
interest-])aying  bonds  secured  by  first  mortgage  on  unen- 
cundiered  real  estate  situated  in  this  State,  worth  at  least 
double  the  amount  loaned  thereon,  and  not  in  default,  as 
nmy  be  approved  b}'  the  Board  of  Public  Works,  having  a 
market  value  not  less  than  one  hundred  thousand  dollars. 

Sec\  21.  Deposit  hj/  Industrial  Life  hisurance  Com- 
panies. Industrial  life  insurance  companies  of  this  State 
falling  within  the  class  referred  to  and  authorized  by  Sec- 
tion 96  shall,  before  being  entitled  to  transact  any  business 
of  insurance,  transfer  and  assign  to  and  deposit  with  the 
Insurance  Commissioner,  in  trust,  as  security  for  the  hold- 
ers of  policies  or  other  obligations  of  said  companies, bonds, 
coin  or  treasury  notes  of  the  United  States  of  America,  or 
securities  mentioned  and  authorized  by  Section  20,  having 
a  market  value  of  not  less  than  fifty  thousand  dollars;  and 
such  companies  falling  within  the  class  referred  to  and 
authorized  by  Section  97,  and  not  by  law  otherwise  provid- 
ed for,  shall  deposit  with  the  Insurance  Commissioner,  in 
trust,  as  aforesaid,  bonds,  coin  or  treasury  notes  or  securi- 
ties as  above  mentioned  and  authorized,  having  a  market 
value  of  not  less  than  ten  thousand  dollars  (|10,000)  nor 
more  than  one  hundred  thousand  dollars  (|100,000.) 


76 


Sec.  22.  Deposit  of  Securities  by  Foreign  Companies. 
Every  foreigu  company  writing  life,  health,  accident,  lia- 
bility, compensation  or  casualty  insurance,  or  fidelity  or 
surety  bonds,  shall,  before  being  entitled  to  receive  a  li- 
cense to  do  any  business  of  insurance  in  this  State,  assign 
to  and  deposit  with  the  Treasurer  of  the  State  of  Mary- 
land, in  trust,  as  security  for  all  the  holders  of  policies  or 
otlier  obligations  of  said  companies  within  this  State, 
bonds,  coin  or  treasury  notes  of  the  United  States  of  Ameri- 
ca, or  securities  of  the  same  kind  in  the  same  amount 
as  required  by  Sections  20  and  21  of  domestic  companies 
doing  the  same  class  of  business,  unless  said  companies 
shall  have  deposited  with  some  proper  official  of  the  State 
where  incorporated  or  organized,  or  in  some  other  State  of 
the  United  States,  in  trust,  as  security  for  all  the  holders 
of  policies  or  other  obligations  of  said  company  in  the 
United  States  of  America,  coin,  notes  or  securities  author- 
ized by  the  insurance  laws  of  the  State  where  incorj^orated 
or  organized,  and  ai)proved  by  the  proper  official  thereof 
and  having  authority  therefor,  to  an  amount  not  less  than 
that  required  of  companies  doing  the  same  class  of  business 
by  the  laws  of  this  State  to  be  deposited  with  the  Treasurer 
(»f  til  is  State. 

Se(\  23.  Additiomil  Deposits.  Whenever  any  of  tlie  se- 
curities required  to  be  deposited  as  provided  by  Sections 
20,  21  and  22,  shall  depreciate  in  value  so  that  the  market 
value  of  the  deposit  shall  be  less  than  that  required  by  said 
sections,  additional  securities  shall  be  deposited  in  order 
that  the  deposit  shall  at  all  times  be  maintained  in  the 
amount  of  not  less  than  that  re(]uired  by  said  sections. 

Sec.  24.  J'J.rc/i<ni(/e  and  Surrender  of  Deposits.  Any  de- 
])osit  of  coin,  treasury  notes  or  securities  as  aforesaid  made, 
may  at  any  time  be  witlulrawn  by  the  company  making  the 
same,  under  such  rules  and  regulations  as  the  Treasurer  of 
iMaryland  or  the  Insurance  Commissioner,  respectively, 
with  whom  made,  may  reasonably  make,  upon  the  joint 
written  re(iuest  of  the  comi)any  having  made  said  deposit, 


77 

and  the  Insurance  Commissioner,  provided  other  securities 
authorized  by  law  and  of  at  least  equal  value  shall  be  sub- 
stituted therefor.  Whenever  it  shall  appear  to  the  satis- 
faction of  the  said  Treasurer  or  the  Insurance  Commis- 
sioner, respectively,  with  whom  any  deposit  shall  have  been 
made  as  aforesaid,  that  tlie  company  having-  made  such  de- 
posit has  surrendered  its  charter  or  ceased  to  do  business 
in  this  State,  and,  if  a  domestic  company,  has  discharged 
all  of  its  obligations,  or  if  a  foreign  company  has  dis- 
charged all  of  its  obligations  in  this  State,  he  shall,  upon 
the  joint  written  reciuest  of  the  said  company  and  the  In- 
surance Commissioner,  surrender  to  said  company  any  de- 
posit so  held.  All  surrenders  shall  be  countersigned  by 
the  Insurance  Commissioner. 

Sec.  2").  f>(iJc  of  and  Income  From  Deposits.  All  deposits 
made  under  the  provisions  of  any  of  the  preceding  sections 
shall  be  held  by  said  Treasurer  or  Commissioner,  subject  to 
sale  and  transfer  and  to  the  application  of  the  proceeds  of 
any  such  sale  only  on  the  order  of  a  court  of  competent 
jurisdicton.  So  long  as  a  company  shall  be  solvent  and  not 
in  default  under  any  section  of  this  Article,  it  shall  be  en- 
titled to  receive  the  income  from  any  deposit  made  under 
any  of  the  preceding  sections. 

Sec.  26.  Investment  of  Reserves.  Every  insurance  com- 
pany, domestic  or  foreign,  authorized  to  do  business  in  this 
State,  must  have  and  continually  keep  an  amount  equal  to 
its  entire  reinsurance  reserve  and  all  other  debts  and  claims 
against  it,  exclusive  of  capital  stock,  invested  in  the  bcmds, 
coin  or  treasury  notes  of  the  United  States,  or  interest,  or 
dividend-paying  bonds  or  stocks  of  this  or  any  other  State 
of  the  United  States,  or  of  any  county,  incorporated  city 
or  other  corporation  of  this  or  any  other  State  having  legal 
authority  to  issue  the  same,  and  not  in  default,  or  in  real 
estate  for  the  office  or  business  purposes  only  of  said  com- 
pany; provided,  however,  that  they  shall  have  the  right  to 
purchase  and  hold  real  estate  under  a  foreclosure  of  their 


78 

own  mortgages  for  a  period  of  not  more  than  five  years, 
and  for  five  years  longer  if,  in  the  judgment  of  the  Insur- 
ance Commissioner,  it  is  advisable  so  to  do;  or  it  may  be 
invested  in  ground  rents,  or  loaned  upon  first  mortgages- on 
unincumbered  fee-simple,  or  improved  leasehold  real  es- 
tate, in  this  or  any  other  State  of  the  United  States,  to  an 
amount  not  exceeding  sixty  per  cent,  of  the  fair  market 
value  of  such  fee-simple,  or  improved  leasehold,  real  estate. 
Whenever  such  loans  are  made  upon  fee-simple,  or  im- 
proved leasehold  real  estate,  which  is  improved  by  a  build- 
ing or  buildings,  the  said  improvements  shall  be  insured 
against  loss  by  fire  and  the  fire  insurance  policies  shall  be 
duly  assigned  to  the  mortgagee  as  additional  security  for 
tlie  said  loan  ;  or  it  may  be  loaned  on  pledges  of  any  se- 
curity named  in  this  section,  or  on  the  policies  of  the  com- 
pany in  force,  provided,  that  each  loan  is  less  than  the  net 
reserve  of  the  policy  on  which  the  loan  is  made,  according 
to  the  standard  of  valuation  prescribed  in  this  Article;  and 
provided,  tliat  the  current  market  value  of  such  pledged 
securities,  other  than  the  bonds  and  stocks  of  this  State,  or 
of  the  United  States,  shall  be  at  all  times  during  the  con^ 
tinuance  of  such  loans,  at  least  ten  per  cent,  more  than  the 
sum  loaned  on  tliem.    All  such  loans  shall  be  f;ubject  to  the 
power  of  the  company  to  terminate  the  same  in  the  case  of 
tlie  depreciation  of  the  securities  below  that  limit.    In  all 
investments  made  upon  mortgage  securities,  the  evidence 
of  the  debt  shall  accompany  the  mortgage  or  deed  of  trust, 
and  the  Insurance  Commissioner  shall  have  the  authority, 
when  any  of  the  securities  mentioned  in  this  section  and 
held  by  any  insurance  company  reporting  to  him  are  of 
doubtful  market  value,  or  without  any  ascertainable  value 
on  the  exchange,  to  cause  the  same  to  be  appraised  by  two 
disinterested  and  competent  persons,  whose  estimate  of  the 
value  of  such  securities  shall  be  taken  to  be  the  value  there- 
of, unless  the  company,  by  placing  some  of  them  upon  the 
nuirket,  and  obtaining  a  bona  fide  offer  therefor,  shall  so 
establish  for  them  a  different  value. 


79 


Sec.  27.  Business  Shall  Be  Conducted  in  Own  Name. 
Every  insurance  company,  foreign  or  domestic,  shall  con- 
duct its  business  in  this  State  in  its  own  proper  or  cor- 
porate name,  and  the  policies  or  contracts  of  insurance  is- 
sued by  it  shall  be  headed  or  entitled  only  by  its  proper  or 
corporate  name. 

Sec.  28.  Misleading  Name.  No  insurance  company  of 
this  State  shall  assume  the  name  of  any  foreign  or  domestic 
corporation,  or  one  so  closely  resembling  it  as  to  mislead 
the  public  as  to  its  identity. 

Sec.  21).  Admission  of  Foreign  Companies.  No  foreign 
insurance  company  shall,  directly  or.  indirectly,  transact 
any  business  of  insurance  in  this  State  unless  and  until  it 
shall  be  fully  organized  and  possessed  of  the  amount  of 
capital  required  of  similar  companies  formed  under  the 
laws  of  this  State,  and  until  the  following  conditions 
sliall  have  been  fully  complied  with  and  there  shall 
have  been  granted  by  the  commissioner  a  license  to  said 
company.  There  shall  be  filed  with  the  Insurance  Commis- 
sioner, first,  a  copy  of  its  charter,  declaration  of  organiza- 
tion or  ^eed  of  settlement,  duly  certified  by  the  proper  of- 
ficial of  its  home  State,  with  his  certificate  that  said  com- 
pany is  entitled  to  assume  risks  and  issue  policies  therein; 
secondly,  a  power  of  attorney,  appointing  a  citizen  of  this 
State,  resident  within  this  State,  the  agent  or  attorney  for 
the  company,  upon  whom  process  of  law  may  be  served,  to- 
gether with  a  certified  copy  of  the  vote  or  resolution  of  the 
directors  appointing  such  attorney,  which  said  appoint- 
ment shall  continue  until  another  attorney  shall  be  sub- 
stituted. Said  writing  or  power  of  attorney  shall  stipulate 
and  agree,  on  the  part  of  the  company  making  the  same^ 
that  any  lawful  process  against  said  company  which  is 
served  on  such  agent,  shall  be  of  the  same  legal  force  and 
validity  as  if  served  on  such  company  within  this  State, 
and  also,  that  in  case  of  the  death  or  absence  of  the  attor- 
ney so  appointed,  service  of  process  may  be  made  upon  the 
Insurance  Commissioner.    Said  power  of  attorney  cannot 


80 

be  revoked  or  modified,  except  tliat  a  new  one  may  be  sub- 
stituted, 80  long  as  any  policy  or  liability  remains  outstand- 
ing against  such  company  in  this  State.  The  term  process, 
used  above,  shall  be  held  and  deemed  to  include  any  writ, 
summons  or  order,  whereby  any  action,  suit  or  proceeding 
shall  be  commenced,  or  which  shall  be  issued  in  or  upon  any 
action,  suit  or  proceeding,  by  any  court,  officer  or  magis- 
trate; thirdly,  a  statement  of  the  condition  of  the  company 
on  the  thirty-first  day  of  December  next  preceding,  under 
oath  of  the  president  or  vice-president  of  the  company, 
with  that  of  the  secretary  or  actuary,  as  hereinafter  pro- 
vided; fourthly,  a  certificate  by  every  company  writing 
life,  accident,  health,  liability  or  compensation  insurance, 
or  fidelity  or  surety  bonds,  which  shall  be  renewed  annual- 
ly, from  the  commissioner  or  superintendent  of  insurance 
or  proper  financial  officer  of  the  State  in  which  such  com- 
pany is  organized,  or  by  the  Treasurer  of  the  State  of  Mary- 
land, or  of  some  other  State  of  the  United  States,  setting 
forth  that  such  company  has  deposited  with  him  the  sum 
of  one  hundred  thousand  dollars  of  its  capital  or  assets,  in 
bonds,  coin  or  treasury  notes  of  the  United  States,  or  in 
bonds  of  the  State  of  Maryland  or  of  the  State  in  Avhicii 
said  deposit  is  made,  or  in  bonds  secured  by  mortgage  or 
deeds  of  trust  on  unincumbered  real  estate,  worth  at  least 
double  the  amount  loaned  thereon,  and  that  he  holds  the 
same  in  trust  and  on  deposit,  under  and  by  the  laws  of  the 
State  in  which  he  resides,  for  the  benefit  of  all  the  policy- 
holders of  such  company  in  the  United  States,  and  that  he 
is  satisfied  that  the  securities  so  deposited  by  such  company 
and  held  by  him  are  worth  at  least  one  hundred  thousand 
dollars;  fifthly,  a  requisition  for  the  appointment  of  each 
agent  or  solicitor,  executed  by  the  proper  officers  or  author- 
ized representative  of  the  company,  certifj^ing  to  the  fitness 
of  the  appointee  and  signed  by  the  agent  or  solicitor  apply- 
ing for  a  license,  in  accordance  with  the  provisions  of  sec- 
tion 60.  A  company  may  designate  any  representative  as 
principal  or  general  agent  or  state  manager,  and  any  repre- 


81 


sentative  thus  clesigDated  shall  be  authorized  to  requisitipn 
upoD  the  commissioner  for  the  appointment  of  sub-agents 
or  solicitors. 

Sec.  30.  Ccrtipcutes  of  Authority  to  Domestic  Company. 
No  company  incorporated  under  the  laws  of  this  State 
shall,  directly  or  indirectly,  transact  ixwj  business  of  in- 
surance until,  first  there  shall  haye  been  filed  with  the  com- 
missioner a  duly  certified  copy  of  its  charter;  secondly,  it 
shall  haye  made  the  deposit  of  cash  or  securities  required 
1)}'  this  Article,  according'  to  the  class  of  business  to  be 
transacted,  and  a  certificate  of  said  deposit  from  the  Treas- 
urer of  this  State  filed  with  the  commissioner,  unless  said 
deposit  shall  be  made  with  the  commissioner  under  the  pro- 
yisions  of  Section  21;  thirdly,  the  commissioner  shall  haye 
examined  the  officers  of  such  company,  under  oath,  to  ascer- 
tain wliether  or  not  the  capital  required  of  the  company 
and  authorized,  by  its  charter,  according  to  the  nature  of 
the  business  proposed  to  be  transacted  by  it,  has  been  paid 
in  cash  and  is  held  by  the  board  of  directors  subject  to  their 
actual  control  in  accordance  with  the  proyisions  of  the 
charter  of  said  company,  or  has  been  inyested  by  them  in. 
securities  authorized  by  this  Article;  fourthly,  the  officers 
or  incorporators  of  such  company  shall  haye  certified, 
under  oath,  that  the  capital  exliibited  to  the  commissioner 
is  bona  fide  property  of  the  company,  and  fifthly,  there 
shall  haye  been  granted  by  the  commissioner  a  license  or 
certificate  of  authority  to  said  company. 

Sec.  31.  Annual  Statement.  Every  insurance  company 
conducting  any  branch  of  insurance  business  in  this  state, 
must  transmit  to  the  insurance  comnnssioner  a  statement 
of  its  condition  and  business  for  tlie  year  ending  on  the  pre- 
ceding thirty-first  day  of  December,  which  statement  shall 
be  rendered  on  the  first  day  of  January  following,  or  within 
sixty  days  tliereafter  (except  that  companies  of  foreign 
countries  may  transmit  their  statements  of  business,  other 
than  that  done  in  the  United  States,  at  any  time  prior  to 
the  following  first  of  July),  which  statements  must  be  in 


82 


the  form  aiul  state  the  particulars  required  by  the  blaulvs 
prescribed  by  the  insurance  commissioner;  and  he  may  re- 
quire at  any  time  statements  from  any  company  doing  busi- 
ness within  this  state,  or  from  any  of  its  officers  or  agents, 
on  sucli  points  as  he  may  deem  necessary  and  x>roper  to 
elicit  a  full  exhibit  of  its  business  and  standing;  all  of 
which  statements  herein  required  must  be  certified  by  tlic 
signatures  and  oath  of  the  president  or  vice-president  of  tlie 
company,  with  that  of  the  secretary  or  actuary.  No  com- 
pany Iiaving  neglected  to  file  a  statement  required  of  it 
within  the  time  and  manner  prescribed  shall  do  any  new 
business,  after  notification  by  the  insurance  commissioner, 
while  such  neglect  continues;  and  any  company  neglecting 
for  thirty  days  to  make  and  transmit  any  statements  re- 
quired, shall  forfeit  one  hundred  dollars  for  each  day's 
neglect. 

Sec.  32.  Piihlication  of  Abstracts  of  Annual  Statements. 
The  insurance  commissioner  shall  annually  publish  once  a 
week  for  tlireii  consecutive  weeks  in  a  daily  newspaper  pub- 
lished in  the  City  of  Baltimore,  an  abstract  of  the  annual 
statement  of  each  insurance  company,  mutual  or  stock, 
doing  business  in  this  state,  except  domestic  companies 
Imving  their  principal  office  in  one  of  the  counties  of  this 
state,  in  which  case  said  publication  sluill  be  in  the  countj^ 
where  the  principal  office  of  any  such  company  is  located. 
The  actual  cost  of  such  publication  by  the  commissioner 
shall  be  taxed  against  and  collected  from  the  companies 
whose  statements  are  so  published  by  him.  Each  of  said 
conqKinies  except  such  nuitual  companies  as  are  excepted 
under  the  provisions  of  Section  122  shall,  in  addition  to 
said  ]»ubli('alion  by  the  comnnssioner,  pu])lisli  said  abstract 
of  its  annual  statement  in  another  pai)er  in  Baltimore  City, 
for  three  consecutive  times.  Tlie  commissioner  and  the 
comi)any  shall  cause  the  first  ai)pearance  of  tlie  publication 
of  the  abstract  of  each  said  company  prior  to  tlie  first  da}' 
of  April.  The'  commissioner  shall,  upon  the  payment  of  a 
fee  of  one  dollar,  furnish  a  certified  copy  of  such  abstract 
so  ])n])lished,  to  any  person  api)lying  therefor. 


83 

Sec.  33.  Conditions  Precedent  to  Beginning  Business. 
No  person  shall  act  as  agent  or  solicitor  in  this  state  for 
any  insurance  company  in  any  manner  whatever  relating 
to  insurance  risks,  until  all  the  provisions  of  this  article 
relating  thereto  have  been  comi^lied  with,  and  there  has 
been  granted  by  the  insurance  commissioner  a  certificate 
of  authority  or  license  to  said  company.  All  such  licenses 
sliall  be  issued  annualh'  on  the  first  day  of  January,  for  the 
period  of  one  year,  upon  tlie  payment  of  the  license  fee  here- 
inafter specified.  All  licenses  issued  for  a  period  less  than 
a  3'ear,  except  in  the  case  of  domestic  companies  embraced 
within  the  provisions  of  Section  38,  shall  pay  pro  rata  for 
siuh  fractional  part  of  the  year. 

Sec.  34.  License  Fees  of  Foreign  Life  Companies.  Every 
foreign  company  doing  a  life  insurance  business  in  this 
state  shall  pay  an  annual  license  fee  of  three  hundred 
dollars. 

Sec.  35.  License  Fees  of  Foreign  Fire  and  Miscellaneous 
CoiHjKinic>!.  Every  foreign  company  doing  a  fire,  marine  or 
inland  insurance  business  in  this  state,  and  every  fidelity, 
surety,  casualty,  liability  or  compensation  company  or- 
ganized under  the  laws  of  any  foreign  country,  shall  pay 
an  annual  license  fee  of  one  hundred  dollars.  No  license 
fee  shall  be  required  of  or  collected  from  any  company  in- 
corporated under  the  laws  of  any  state,  territory,  district 
or  dependency  of  the  United  States  other  than  the  State  of 
Maryland,  for  the  purpose  of  carrying  on  any  of  the  classes 
of  insurance  known  as  liability,  workmen's  compensation, 
accident,  health,  sprinkler  leakage,  burglary,  credit  indem- 
nity, or  casualty  insurance,  or  the  writing  of  fidelity  and 
surety  bonds,  except  under  the  retaliatory  provisions  here- 
after referred  to. 

Sec.  36.  License  Fees  of  Domestic  Surety  and  Casnaltg 
Companies.     Every  domestic  company  doing  a  liability, 
workmen's  compensation  or  casualty  insurance  business,  or 
:      the  business  of  writing  fidelity  or  surety  bonds,  shall  pay 
an  annual  license  fee  of  fifteen  hundred  dollars. 


84 


Sec.  37.  L'wensG  Fees  of  Title  and  Mortgage  Guarantee 
Companies.  Every  eomi)aiiy  doing  a  title  insurance  or 
mortgage  guarantee  business  sliall  pay  an  annual  license 
fee  of  one  hundred  dollars. 

Sec.  38.  License  Fees  of  Domestic  Life,  Fire,  etc.,  Com- 
panies. Every  domestic  company  doing  a  life,  fire,  marine 
or  other  insurance  business  than  as  embraced  in  sections 
3G  and  37,  shall  pay  an  annual  license  fee  of  one  dollar. 

1922  ch.  547. 

Sec.  39.  Ta.r  on-  Proniiuns.  Every  insurance  company 
(including  Fidelity,  Surety,  Casualty,  Liability,  Compen- 
sation, Livestock  and  Miscellaneous  companies),  other 
tlian  sucli  as  may  be  chartered  under  the  laws  of  the  State 
of  Maryland,  and  every  company  of  this  State  writing 
fidelity,  surety,  casualty,  liability,  and  compensation  in- 
surance, shall  pay  annually  to  the  Insurance  Commissioner 
a  tax  on  gross  premiums  Avritten  in  this  State  during  the 
preceding  year,  without  deduction  for  any  cause  whatever 
except  as  herein  provided,  which  said  tax  shall  be  at  the 
rate  of  two  per  cent,  for  foreign  companies  on  their  fire  or 
marine  insurance  writings,  at  the  rate  of  one  per  cent,  for 
all  companies,  foreign  and  domestic,  on  their  fidelity, 
surety,  casualty,  liability,  and  compensation  insurance 
writings,  and  at  the  rate  of  one  and  one-half  per  cent,  for 
foreign  companies  on  insurance  writing  other  than  tliose 
above  mentioned.  A  report  under  oatli  of  the  premiums  so 
written  during  the  preceding  year  nnist  be  made  to  the  In- 
surance Commissioner  in  January  of  each  year  by  the  cliief 
accounting  officer  or  ollicers  of  sucli  company.  Tlie  In- 
surance Commissioner,  in  computing  taxes  upon  premiums 
written  in  tliis  State  by  insurance  companies  shall  allow 
credit  for  return  premiums  on  cancelled  policies  and  for 
premiums  on  reinsurance  effected  in  companies  authorized 
to  do  business  in  this  State. 

vSkc.  40.  MisceUaneoiis  Fees.  Every  insurance  company 
doing  business  in  tliis  state  sliall  also  pay  the  following 
fees  to  the  insurance  commissioner : 


85 


(a)  For  tiling  the  certilied  copy  of  charter,  declaration 
of  organization  or  deed  of  settlement  required  by  this  ar- 
ticle to  be  tiled  as  a  condition  precedent  to  doing  business 
in  this  state,  the  sum  of  twenty-fiTe  dollars. 

(b)  For  tiling  eacli  annual  statement,  the  sum  of  twenty- 
five  dollars. 

(c)  For  the  certificate  of  authority'  issued  to  each  agent 
in  this  state  of  every  foreign  fire  or  marine  insurance  com- 
pany, the  sum  of  ten  dollars. 

(d)  For  tlie  certificate  of  authority  issued  to  each  so- 
licitor in  this  state  of  every  foreign  fire  or  marine  insurance 
company,  the  sum  of  five  dollars. 

(e)  For  the  certificate  of  authority  issued  to  each  agent 
in  this  state  of  every  foreign  insurance  company  other  than 
fire  or  marine,  the  sum  of  two  dollars. 

(f )  For  the  certificate  of  authority  issued  in  this  state  to 
each  insurance  agent  or  solicitor  of  every  insurance  com- 
pany incorporated  under  the  laws  of  this  state,  the  sum 
of  fifty  cents. 

(g)  For  each  abstract  of  its  annual  statement  for  pub- 
lication, two  dollars. 

(h)  For  every  copy  of  ever}'  paper  filed  in  the  insurance 
department,  the  sum  of  twenty-five  cents  per  folio;  and  for 
affixing  the  official  seal  to  such  copy,  the  sum  of  one  dollar. 

(i)  For  valuing  policies  of  life  insurance  companies 
thirty  dollars  per  million  of  insurance,  or  any  fractional 
part  thereof. 

(j)  For  official  examination  of  companies  under  this 
article,  the  charges  specified  in  section  50  of  this  article. 

Sec.  41.  Retaliatory  Provisions.  When  by  the  laws  of 
any  other  state,  any  deposit  of  money  or  securities  is  re- 
quired, or  taxes,  fees,  fines,  penalties  or  other  obligations 
or  prohibitions  are  imposed  upon  companies  incorporated 
or  organized  under  the  laws  of  this  state,  and  transacting 


86 

business  in  such  other  state,  or  upon  the  agents  of  such 
companies,  greater  than  tliose  required  or  imposed  by  the 
laws  of  this  state,  so  long  as  sucli  laws  remain  in  force,  the 
same  deposits,  taxes,  fees,  fines,  penalties,  obligations  and 
prohibitions  shall  be  imposed  upon  all  agents  or  companies 
of  sucli  state  doing  l)usiness  in  tliis  state,  instead  of  those 
prescribed  by  the  laws  of  this  state. 

Sec.  42.  Production  of  Books,  etc.  No  person  shall  be 
excused  from  testifying  or  from  producing  any  books, 
papers,  contracts,  agreements  or  documents  at  tlie  trial  or 
liearing  of  any  person  or  company  charged  with  violating 
any  provision  of  this  article  on  tlie  ground  that  such  testi- 
mony or  evidence  may  tend  to  incriminate  himself,  but  no 
person  shall  be  prosecuted  for  any  act  concerning  which  he 
shall  be  compelled  so  to  testify  or  produce  evidence,  doc- 
umentary or  otherwise,  except  for  perjury  committed  in 
so  testifying. 

Sec.  43.  Blue  Skij  Prorisious.  No  stock  salesman, 
broker  or  other  person  representing  any  insurance  com- 
pany, wherever  incorporated,  in  process  of  organization 
and  not  licensed  to  transact  business  in  this  state,  shall  be 
permitted  to  solicit  subscriptions  to  or  sell  the  stock  of 
sucli  company  in  this  state  unless  and  until  such  company 
has  furnished  tlie  insurance  commissioner  witli  full  par- 
ticulars as  to  the  methods  and  proposed  cost  of  promotion. 
Before  any  such  person  shall  solicit  subscriptions  to  or  sell 
tlie  stock  of  such  company,  he  shall  be  required  to  secure  a 
license  from  the  Insurance  commissioner,  who,  prior  to  the 
issuance  of  such  license,  shall  investigate  the  record  of  the 
applicant  and  may,  for  good  cause  shown,  refuse  to  issue 
same.  The  fee  for  each  such  license  shall  be  ten  dollars. 
The  cost  of  promotion,  including  commissions  to  the  stock 
salesmen  and  all  expenses  of  organization  of  whatever 
character,  shall  not  exceed  five  per  centum  of  the  subscrip- 
tion or  selling  price  of  each  share  of  stock,  and  the  in- 
surnnce  commissioner  shall  require  this  provision  to  be 
plainly  set  forth  in  the  stock  subscription  agreement  or 


87 


contract  for  tlie  sale  of  stock.  No  part  of  the  commissions 
to  the  salesmen  or  other  organization  expense  under  any 
subscription  for  stock  shall  be  payable  until  such  share  or 
shares  of  stock  have  been  fully  paid  for  in  cash  or  secvirities 
or  equivalent  value.  The  subscription  to  or  sale  of  stock 
in  any  such  company  in  series  is  prohibited,  except  that 
after  a  company  is  organized  and  actively  engaged  in  the 
insurance  business,  the  insurance  commissioner  is  em- 
powered to  authorize  it  to  sell  a  new  issue  of  stock  at  an 
advanced  price  on  conditions  not  otherwise  inconsistent 
with  tlie  ])rovisions  of  tliis  section.  The  fiscal  agent,  person 
or  corporation  engaged  in  promoting  the  organization  of 
any  sucli  insurance  company  shall  be  required  to  give  to 
the  insurance  commissioner  a  surety  bond  in  the  amount  of 
ten  per  cent,  of  tlie  ])roposed  maximum  capital  of  such 
company  for  tlie  faithful  performance  of  the  undertaking 
in  accordance  witli  tlie  provisions  of  this  section  by  both 
himself  and  his  salesmen. 

Any  violation  of  the  provisions  of  this  section  shall  be 
deemed  a  misdemeanor  and  shall  be  punishable  by  a  line 
not  exceeding  one  hundred  dollars  for  the  first  offense,  and 
by  a  fine  of  not  less  than  one  hundred  dollars  or  more  than 
one  thousand  dollars  for  each  subsequent  offense. 

Sec.  44.  Rehatinf/  UnlaiDful  {Life  and  Accident.)  No 
insurance  company  doing  business  in  this  state  shall  make 
or  permit  any  discrimination  or  distinction  in  favor  of  in- 
dividuals of  the  same  class  and  equal  expectation  of  life  in 
the  amount  of  premiums  or  rates  charged  for  policies  of 
life  or  endowment  insurance,  or  for  policies  insuring  per- 
sons against  accidental  bodily  injury,  or  in  any  of  the  terms 
and  conditions  of  the  contracts  it  makes,  as  an  inducement 
of  such  insurance;  nor  shall  any  such  company  or  any  of- 
ficer, agent,  solicitor  or  representative  thereof,  or  any  in- 
surance broker,  pay,  allow  or  give,  or  offer  to  pay,  allow 
or  give,  directly  or  indirectly,  as  inducement  to  such  in- 
surance, or  after  the  insurance  shall  have  been  effected, 
any  rebate  from  the  premium  which  is  specified  in  the 
policy,  nor  shall  the  insured,  his  agent  or  representative. 


88 


directly  or  iDclirectly  accept  or  knowingly  receive  any  re- 
bate from  the  premium  specified  in  the  policy,  or  any  spe- 
cial favor  or  advantage  in  the  dividends  or  other  benefits 
to  accrue  tliereon,  or  any  joaid  employment  or  contract  for 
services  of  any  kind,  or  any  special  advantage  in  date  of 
policy  or  age  of  issue,  or  any  valuable  consideration  what- 
ever, not  specified  in  the  policy.  Nor  shall  any  company, 
or  its  representatives,  procure  for  any  person  applj'ing 
for  insurance,  or  for  any  person  acting  in  collusion  with 
him  in  seeking  to  avoid  tlie  penalty  prescribed  for  violation 
of  this  section,  a  state  license  for  the  i)urpose  of  allowing 
such  jjerson  a  rebate.  Provided  that  nothing  in  this  sec- 
tion shall  be  so  construed  as  to  forbid  a  company  trans- 
acting industrial  insurance  on  the  weekly  payment  plan, 
with  weekly  collection  of  premiums  at  the  houses  of  the 
insured,  from  returning  to  policyholders  who  have  made 
premium  payments  directly  to  the  company  at  its  home 
office  or  district  offices,  the  savings  which  the  company 
effects  through  such  direct  payments;  and  provided  fur- 
ther that  nothing  in  this  section  shall  be  so  construed  as  to 
forbid  a  company  issuing  non-participating  life  insurance 
from  paying  bonuses  to  policyholders  out  of  surplus  ac- 
cumulated from  such  non-participating  insurance. 

Se(\  45.  Rehat'nif/  UnhnrfHl  (Fire  and  MisceUaneous.) 
No  fire,  casualty,  surety  or  other  insurance  company, 
Lloyds,  or  individual  underwriters  authorized  to  do  in- 
surance business  in  this  state,  or  any  officer,  agent,  solicitor 
or  representative  thereof,  shall  make  any  contract  for  in- 
surance on  property  or  risks  located  within  this  state 
against  liability,  casualty,  accident  or  hazard  of  any  kind 
tlmt  may  arise  or  occur  therein,  or  agreement  as  to  such 
contract,  other  than  as  plainly  expressed  in  the  policy 
issued  or  to  be  issued  thereon  ;  nor  shall  any  such  company, 
Lloyds,  or  individual  underwriter,  or  any  officer,  agent, 
solicitor,  or  representative  tliereof,  directly  or  indirectly, 
in  any  manner  whatsoeA'er,  pay  or  allow,  or  offer  to  pay  or 
allow,  as  inducement  for  such  insurance,  or  after  the  in- 
surnnce  sluill  have  been  affected,  any  rebate  from  the  pre- 


89 

mium  which  is  specified  in  the  policy,  or  any  special  favor 
or  advantage  in  the  dividends  or  other  benefits  to  accrue 
thereon,  or  any  valuable  consideration  or  inducement 
whatever  not  specified  in  the  policy  or  contract  of  in- 
surance; nor  shall  any  insurance  broker,  his  agent  or  rep- 
resentative, or  any  other  person,  directly  or  indirectly, 
either  by  sharing  commissions  or  in  any  manner  whatso- 
ever, pay  or  allow,  or  offer  to  pay  or  allow  as  inducement  to 
such  insurance,  or  after  the  insurance  shall  have  been 
effected,  any  rebate  from  the  premium  which  is  specified  in 
the  policy;  nor  shall  the  insured,  his  agent  or  representa- 
tive, directly  or  indirectly,  accept  or  knowingly  receive 
from  any  company,  Lloyds,  or  individual  underwriters,  or 
from  any  insurance  broker  or  other  person,  any  such  rebate 
of  premium  payable  on  the  policy,  or  any  special  favor  or 
advantage  in  the  dividends  or  other  benefits  to  accruethere- 
on.  Tliis  section  shall  not  prevent  any  company  lawfully 
doing  such  insurance  business  in  this  state  from  the  distri- 
bution of  surplus  and  dividends  to  policyholders  after  the 
first  year  of  insurance,  or  prevent  any  member  of  an  inter- 
insurance  or  Lloyd's  association  from  receiving  the  profit 
on  his  or  its  underwriting;  nor  shall  this  section  prevent 
any  licensed  insurance  broker  from  sharing  or  dividing  a 
commission  earned  or  received  by  him  with  any  other 
licensed  insurance  broker  who  shall  have  aided  him  in 
respect  of  the  insurance,  for  the  negotiation  of  which  such 
commission  shall  have  been  earned  or  paid. 

Sec.  46.  Misrepresentation  of  Terms  of  Policy.  No  in- 
surance company,  or  any  officer,  director,  agent,  broker  or 
solicitor  thereof,  shall  issue,  circulate  or  cause  or  permit 
to  be  issued,  circulated  or  used,  any  statement,  estimate, 
illustration  or  circular  misrepresenting  the  terms  of  any 
policy  issued  or  the  benefits  or  privileges  promised  under 
any  such  policy,  or  the  future  dividends  payable  under 
such  policy. 

Sec.  47.  Penalties  for  Violation  of  Sections  44,  45  and 
46.  Any  person  or  corporation  violating  any  of  tlie  provi- 
sions of  sections  44,  45  and  46  of  this  article  shall  be 


90 

guilty  of  a  misdemeanor,  and  upon  conviction  thereof  t\w 
offender  or  offenders  shall  be  sentenced  to  pay  a  fine  of  not 
less  than  two  hundred  dollars  or  more  than  five  hundred 
dollars  for  each  and  every  violation  of  either  of  said  sec- 
tions. Any  agent  or  solicitor  of  any  insurance  company, 
or  any  insurance  broker,  shall,  upon  being  convicted  of  a 
second  offense  under  said  sections,  be  disqualified  from  act- 
ing as  an  insurance  agent,  solicitor  or  broker,  for  the  period 
of  one  year  thereafter;  and  it  shall  be  the  duty  of  the  in- 
surance commissioner,  upon  being  satisfied  that  any  in- 
surance company,  or  agent  thereof,  has  violated  any  of  the 
provisions  of  said  sections  44,  45  and  46,  to  report  the  same 
to  the  state's  attorney  for  the  county  or  city  in  which  such 
offense  may  have  been  committed. 

Sec.  48.  Consolidation  of  Companies.    Any  two  corpor- 
ations, one  of  which  is  created  and  existing  under  the  laws 
of  this  state,  and  one  of  which  is  created  and  existing  under 
the  laws  of  any  other  state  or  territory  of  the  United 
States,  and  each  of  which  is  organized  for  the  purpose  of 
undertaking  the  following  classes  of  insurance:  (1)   Acci- 
dent and  health  insurance;  (2)   insurance  against  loss  or 
damage  by  reason  of  injuries  to  employee,  or  other  persons, 
for  which  tlie  insured  is  liable,  and  loss  or  damage  to  prop- 
erty caused  by  horses  or  vehicles  for  which  the  insured  is 
liable;  (3)   fidelity  and  surety  insurance  and  bonding;  (4) 
burglary  and  theft  insurance;  (5)   plate  glass  insurance; 
(6)   steam  boiler,  flywheel  and  machinery  insurance,  in- 
cluding the  liability  of  tlie  insured  for  damage  to  persons 
or  property  of  others;  (7)   loss  or  damage  to  automobiles 
(exce])t  by  fire  or  when  l)eiug  transported  in  any  couA^ey- 
ance  by  land  or  water)  and  legal  liability  for  damage  to 
property  caused  thereby ;  (8)   sprinkler  leakage  insurance ; 
or  any  two  or  more  of  said  classes  of  insurance  may  merge 
or  consolidate  such  corporations  into  one  corporation  in 
the  name  of  one  or  more  corporations.     The  corporations 
may  enter  into  and  make  an  agreement  for  such  merger  or 
consolidation  under  their  respective  corporate  seals,  pre- 
scril)ing  its  terms  and  conditions,  the  amount  of  its  capital, 


91 


which  shall  not  exceed  in  amount  the  aggregate  amount  of 
capital  of  the  merged  or  consolidated  corporations,  and  the 
number  of  shares  into  which  it  is  to  be  divided.  Such  agree- 
ment must  be  assented  to  by  a  vote  of  the  majority  of  the 
number  of  directors  of  each  corporation  prescribed  in  its 
charter,  and  must  be  approved  by  the  votes  of  stockholders 
owning  at  least  two-thirds  of  tlie  stock  of  each  corporation 
represented  to  vote  upon  in  person  or  b}^  proxy  at  a  meeting 
called  specially  for  that  purpose  upon  a  notice  stating  the 
time,  place  and  object  of  tlie  meeting  served  at  least  thirty 
dajs  previously  upon  each  personally  or  mailed  to  him  at 
his  last  known  postoifice  address,  and  also  published  at 
least  once  a  Axeek  for  four  weeks  successively  in  some  news- 
paper printed  in  the  city,  town  or  county  where  such  cor- 
poration has  its  principal  office,  and  there  shall  be  en- 
dorsed upon  the  aggreement  the  certificate  of  the  secre- 
taries of  the  respective  corporations  under  the  seals  thereof 
to  tlie  effect  tliat  the  same  has  l)een  assented  to  by  sucli 
votes  of  diret-toi-s  and  approved  by  such  votes  of  the  stock- 
holders. 

The  agreement  shall  contain  a  copy  of  tlie  cliarter  under 
whicli  the  business  is  to  be  conducted,  which  shall  conform 
to  tlie  provisions  of  either  one  or  more  of  the  charters  of  the 
merging  or  consolidating  corporations,  and  the  continu- 
ance of  said  charter  shall  be  for  the  time  therein  stated,  not 
exceeding  the  longest  unexpired  time  of  tlie  charter  of  one 
of  the  merging  or  consolidating  corporations.  The  agree- 
ment may  provide  that  one  of  the  said  consolidating  cor- 
porations shall  cease  to  exist  and  become  merged  into  the 
other. 

Every  such  agreement  must  have  the  approval  of  the  in- 
surance commissioner  of  this  state,  and  of  the  official  head 
of  the  insurance  department  of  the  state  under  which  said 
foreign  corporation  is  organized.  Upon  filing  such  agree- 
ment with  said  certificates  of  the  secretaries,  and  the  ajj- 
proval  of  the  said  insurance  commissioner,  and  of  the 
official  head  of  the  insurance  department  of  said  state  or 
territory,  in  the  office  of  the  insurance  commissioner  of 


92 


Maryland  and  in  the  office  of  the  said  official  head  of  the 
insurance  department  of  such  other  state  or  territory,  and 
a  certified  copy  tliereof  in  tlie  office  of  the  clerk  of  the 
county  Avliere  the  office  of  the  said  Maryland  corporation  is 
located,  and  in  tlie  office  of  the  clerk  of  the  county  where 
the  office  of  said  foreign  corporation  is  located,  the  details 
of  such  agreement  ma^^  be  carried  into  effect  as  provided 
therein. 

The  corporation  may  require  the  return  of  the  original 
certificates  of  stock  held  by  each  stockholder  in  each  of  the 
corporations  to  be  merged  or  consolidated,  and  issue  in  lieu 
thereof  new  certificates  for  sucli  number  of  shares  of  its 
own  stock  as  said  stockholders  may  be  entitled  to  receive. 

Upon  such  merger  or  consolidation  all  the  rights,  fran- 
chises and  interest  of  the  corporations  so  merging  or  con- 
solidating in  and  to  every  kind  of  property  and  tiling  in 
action  belonging  to  them,  or  either  of  them,  shall  be  deemed 
to  be  transferred  to  and  vested  in  the  new  corporation, 
without  any  other  deed  or  transfer,  and  the  new  corpora- 
tion shall  hold  and  enjoy  the  same  to  the  same  extent  as  if 
the  old  corporations  or  either  of  them,  sliould  have  con- 
tinued to  retain  their  titles  and  transact  business. 

The  new  corporation  shall  be  authorized  to  receive  from 
the  official  head  of  the  insurance  department  of  said  other 
state  or  territory  any  and  all  securities  which  under  the 
laws  of  said  state  or  territory  may  have  been  deposited  with 
]iim  by  any  of  said  old  corporations,  provided  said  deposi- 
tory may  be  authorized  by  tlie  law  of  said  state  or  territory 
to  transfer  the  same  to  said  new  corporation. 

The  new  c()ri)oration  shall  succeed  to  all  the  obligations 
and  liabilities  of  the  old  corporation,  or  any  of  them,  and 
shall  be  held  liable  to  pay  and  discharge  all  such  debts  and 
liabilities  in  the  same  manner  as  if  they  had  been  incurred 
or  contracted  by  it.  The  stockholders  of  the  old  corpora- 
tions shall  continue  subject  to  all  the  liabilities,  claims  and 
demands  existing  against  them,  or  either  of  them,  at  or 
before  said  merger  or  consolidation.  No  action  or  proceed- 
ing pending  at  the  time  of  consolidation  in  which  any  or  all 


93 


of  the  said  old  corporatious  may  be  a  party  shall  abate  or 
discoDtimie  by  reason  of  the  merger  or  cousolidatiou,  but 
the  same  may  be  prosecuted  to  final  judgment  in  the  same 
manner  as  if  the  merger  or  consolidation  had  not  taken 
place,  or  the  new  corporation  may  be  substituted  in  place 
of  any  corporation  so  merged  or  consolidated  by  order  of 
the  court  in  Avhich  the  action  or  proceeding  may  be  pending. 

Sec.  49.  Proi)erti/  of  Foreign  Companies  in  Mart/land. 
Any  foreign  insurance  company  may  acquire  by  purchase 
or  in  any  other  manner,  and  take,  receiye,  hold,  use,  em- 
ploy, manage,  dispose  of,  or  deal  with,  any  property,  real, 
personal  or  mixed,  and  situated  in  the  State  of  Maryland, 
which  may  be  necessary  or  proj)er  to  enable  it  to  erect 
buildings  for  oflftce  or  business  purposes,  or  to  foreclose  any 
mortgages  that  may  be  due  it  for  loans  made;  proyided, 
that  all  transactions,  as  herein  permitted,  shall  be  in  ac- 
cordance with  the  laws  now  in  force  regulating  such  trans- 
actions on  the  part  of  insurance  companies  incorporated 
under  the  laws  of  this  state. 

Sec.  50.  E-raininatioii  of  Comixmics.  Once  at  least  dur- 
ing his  term  of  ottice  the  commissioner  shall  cause  the  af- 
fairs of  eyery  insurance  company  organized  under  the  laws 
of  this  state  to  be  thoroughly  inspected  and  examined  with 
special  regard  to  its  financial  condition  and  its  ability  to 
fulfill  its  obligations,  and  shall  ascertain  and  determine 
whether  or  not  it  has  complied  with  the  laws  of  this  state; 
he  shall  also  cause  an  examination  of  eyery  such  company 
to  be  made  wheneyer  he  deems  it  prudent  to  do  so,  or  upon 
the  request  of  five  or  more  of  the  stockholders,  creditors, 
policyholders,  or  persons  pecuniarily  interested  therein, 
who  shall  make  affidayit  of  their  belief,  with  specifications 
of  reasons  thereof,  showing  a  prima  facie  case  that  such 
company  is  in  an  unsound  condition.  Wheneyer  the  in- 
surance commissioner  may  haye  reason  to  doubt  the  sol- 
yency  or  the  correctness  of  the  statement  of  any  foreign 
company  which  may  haye  been  licensed  to  do  business  in 
this  state,  or  which  may  be  applying  for  said  license,  he 


94 

shall  communicate  such  doubts,  and  the  reasons  therefor, 
to  the  insurance  commissioner,  or  other  officer  charged 
with  the  supervision  of  insurance  corporations  of  the  state 
in  which  said  company  is  located,  and  if  he  is  not  satisfied 
from  the  information  obtained  from  such  insurance  com- 
missioner or  other  officer,  or  from  the  officers  of  the  com- 
pany, that  the  condition  of  the  company  is  such  as  to 
warrant  him  in  permitting  it  to  transact  business  in  this 
state,  under  the  provisions  of  this  article,  he  shall  notify 
such  company  that  it  will  be  necessary  for  him  to  have  its 
affairs  examined.  Whenever  an  examination  of  any  in- 
surance company  doing  business  in  this  state  shall  be 
determined  upon  under  tlie  provisions  of  this  article,  the 
examiner  of  the  insurance  department  and  such  other  per- 
son or  persons  who  shall  be  appointed  by  the  insurance 
commissioner  for  that  purpose  shall  visit  such  company  at 
its  principal  office  and  make  a  thorough  examination  into 
its  affairs;  and  if  such  company  shall  refuse  to  permit  such 
examination,  or  sliall  refuse  free  access  to  all  its  books  and 
papers,  or  shall  in  any  v>SiY  prevent  or  obstruct  a  thorough 
examination  into  its  affairs,  he  shall  not  grant  a  license  to 
sTU-h  company,  or  if  a  license  shall  already  have  been 
granted,  he  shall  at  once  revoke  it  and  publish  the  fact  of 
such  revocation  in  one  daily  newspaper  published  in  the 
city  of  Baltimore.  The  exann'ner  of  the  insurance  depart- 
ment shall  be  paid  by  the  company  whose  affairs  are  ex- 
amined, his  traveling  and  other  expenses,  and  in  addition 
tliereto  a  sum  to  be  approved  by  the  insurance  commis- 
sioner, not  exceeding,  however,  fifteen  dollars  (|15)  for 
each  and  every  day  that  he  shall  be  engaged  in  any  such 
examination  ;  and  such  other  person  or  persons  who  may  b\» 
a])pointed  by  the  insurance  commissioner  for  any  of  th;^ 
])urposes  mentioned  herein  shall  each  b^  paid  by  the  com- 
pany whose  affairs  are  examined  tlieir  traveling  and  otlief 
expenses,  aiul  in  addition  thereto,  a  sum  to  be  approved  by 
the  insurance  commissioner,  not  exceeding,  however,  ten 
(h)llars  (-li^lO)  per  day  for  each  and  every  day  that  he  or 
they  are  engaged  in  any  such  examination ;  except  that  th(; 


95 


iu.suraDce  commissioner  uiay  employ  one  special  examiner 
on  any  examination  that  in  his  judgment  may  require  such 
employment,  who  sliall  be  paid  by  the  company  whose 
affairs  are  examined  his  traveling'  and  other  expenses,  and 
in  addition  thereto,  a  sum  to  be  approved  by  the  insurance 
comndssioner,  not  exceeding,  however,  twenty-five  dollars 
(|25)  per  day,  for  each  and  every  day  that  he  is  engaged 
in  any  sucli  examination ;  and  provided,  further,  that  any 
official  or  employee  of  the  insurance  department  who  shall 
be  directed  by  the  insurance  commissioner  to  assist  in  the 
examination  of  any  insurance  company  organized  and  lo- 
cated outside  of  this  state  and  doing  business  in  this  state, 
shall  be  paid  by  such  company  his  traveling  and  other 
expenses  and  such  reasonable  comi)ensation  as  shall  be 
fixed  by  the  insurance  commissioner,  in  addition  to  the 
salary  paid  such  official  or  employee  out  of  the  funds  of 
said  department.  If  the  per  diem  and  expenses  in  any  case 
herein  provided  shall  remain  unpaid  after  ten  days  from 
the  completion  of  any  such  examination,  the  insurance 
commissioner  may  sue  therefor.  For  the  purposes  of  any 
examination  authorized  by  law,  the  insurance  commis- 
sioner, or  the  insurance  examiner,  shall  have  power  and  is 
hereby  authorized  to  summon  any  person  or  persons  being 
within  this  state,  and  to  administer  to  him  or  them  the 
proper  and  necessary  oath,  and  to  examine  him  or  them, 
under  oath,  in  relation  to  the  affairs  and  conditions  of  any 
insurance  company.  In  order  that  the  public  may  be  fully 
informed  as  to  the  condition  of  all  companies  doing  busi- 
ness in  this  state,  the  result  of  the  official  examination  of 
any  such  company,  in  such  condensed  form  as  shall  show 
the  true  condition  of  the  company  examined,  shall  be  pub- 
lished within  thirty  days  thereafter  by  the  insurance  com- 
missioner, at  the  expense  of  said  company,  in  one  daily 
newspaper  published  in  the  city  of  Baltimore.  Should  any 
insurance  company  organized  under  the  laws  of  this  state 
refuse  to  permit  its  affairs  to  be  examined  as  herein  pro- 
vided, or  refuse  free  access  to  its  books  or  papers,  or  in  any 


96 

manner  whatever  prevent  a  tliorough  examination,  the  said 
insurance  commissioner  shall  proceed  against  said  com- 
pany in  the  manner  provided  in  section  51. 

Sec.  51.  Liqmdation  of  Insolvent  or  JUe<jaUi)  Conducted 
Companies.  Wlienever  the  insurance  commissioner  shall 
have  reason  to  believe  that  any  insurance  company  is  in- 
solvent, or  fraudulently  conducted,  or  that  its  assets  are 
not  sufficient  for  carrying  on  the  business  of  the  same,  or 
during  any  non-compliance  with  the  provisions  of  this 
article,  it  shall  be  his  duty  to  make  complaint  thereof  to 
the  judge  of  either  of  tlie  circuit  courts  of  Baltimore  city, 
or  any  judge  of  the  circuit  court  for  the  county  where  the 
company  or  agent  may  be  located,  as  the  case  may  be; 
wliicli  judge  shall,  upon  the  requisition  of  the  commis- 
sioner, appoint  a  commission,  consisting  of  the  insurance 
commissioner  and  two  disinterested  and  competent  per- 
sons, whose  duty  it  shall  be  to  examine  every  detail  of  the 
business  and  condition  of  said  company  and  report,  in 
writing,  the  result  of  such  examination  to  the  judge  ap- 
pointing tliem,  wlio  sliall,  if  in  his  judgment  the  cliarges 
of  insolvency,  fraud,  neglect  or  abuse,  as  charged  by  tlie 
insurance  commissioner,  are  sustained  by  the  said  report, 
at  once  issue  nn  injunction  suspending  tlie  business  of  said 
company.  The  commissioner  shall  institute,  or  cause  to  be 
iiistituted,  tlie  necessary  proceedings  under  the  laws  of  this 
state,  to  close  the  affairs  of  any  insurance  company  of  this 
state  which  shall  a])pear  to  him,  upon  examination,  to  be 
insolvent  or  to  be  fraudulently  conducted. 

Sec.  52.  J*roccr</iii(/s  to  Vncdie  Churter.  Whenever  the 
attorney  general  of  tlie  state  or  the  state's  attorney  for  the 
city  of  IJaltimore  or  for  any  county  of  the  state  shall  be 
reipiired  by  the  insurance  commissioner  to  institute  pro- 
ceedings against  any  insurance  company  incorporated  un- 
der the  laws  of  this  state,  to  ascertain  whether  such  cor- 
poration has  been  guilty  of  such  misuse,  abuse  or  nonuser 
of  its  corporate  powers  and  franchises,  as  by  law  would 
aulliorizc  and   make  i)ro])er  the  forfeiture  of  its  charter. 


i 


97 


corporate  powers  and  frauchises,  tlie  said  attorney  general 
or  state's  attorne}',  as  the  case  may  be,  shall  file  with  the 
superior  court  of  Baltimore  city,  or  the  circuit  court  for  the 
county,  as  the  case  may  be,  a  petition  in  the  name  of  the 
state,  setting  forth  fully  in  detail  tlie  alleged  abuse,  misuse 
or  nouuser,  by  reason  whereof  the  forfeiture  is  sought;  and 
upon  tlie  filing  of  sucli  petition,  tlie  court  in  which  it  is 
filed,  or  any  judge  tliereof,  shall  lay  a  rule  requiring  the 
said  company  or  corporation  to  show  cause,  within  such 
time  as  the  said  judge  may  deem  proper,  why  a  decree  of 
forfeiture  should  not  be  passed  as  prayed  in  said  petition ; 
a  copy  of  which  rule  and  the  petition  shall  be  served  on  the 
president,  manager,  secretary,  or  some  other  officer  of  the 
said  company  or  corporation,  hy  a  day  to  be  therein  limited, 
not  exceeding  twenty  days,  as  other  processes  against  such 
companies  or  corpoi'ations  are  directed  to  be  served;  and 
further  jjroceedings  shall  be  had  in  said  cause  in  conform- 
ity with  the  pro\isions  of  article  23  with  reference  to  pro- 
ceeding to  vacate  the  charter  of  corporations  of  the  state. 

Sec.  53.  Penalties.  Any  person  or  company  violating 
any  ju-oA'islon  of  any  section  of  this  article  for  which  no 
spei-itir  p'enalty  is  therein  provided,  sl'.all  be  deemed  guilty 
of  a  misdemeanor  and  shall  be  subject  to  a  fine  not  less 
than  one  hundred  dollars  or  more  than  one  thousand  dol- 
lars for  each  and  every  such  offense.  Any  iierson  making 
any  Avillfully  false  statement  in  any  annual  statement, 
report  or  other  written  document  required  by  any  section 
of  this  article  to  be  filed  Vv'ith  the  commissioner  under  oath, 
or  wliile  under  oath  administered  by  the  commissioner, 
dej)uty  commissioner  or  examiner  which  they  are  autlior- 
ized  by  this  article  to  administer,  at  any  investigation  or 
lieariug  conducted  by  said  commissioner,  deputy  commis- 
sioner or  examiner,  which  they  are  authorized  to  conduct, 
shall  be  deemed  to  be  guilty  of  perjury  and  shall  be  pro- 
ceeded against  and  punished  as  provided  hj  the  statutes  of 
this  state  in  relation  to  the  crime  of  perjury. 


98 


Fire  Investif/atioii  Bureau. 

Sec.  54.  InreM'Kjaiwji  of  Fires.  It  shall  be  the  duty  of 
the  cojiiiiiissioiier,  or  of  the  Kspecial  deputy  appointed  by 
111  111  for  that  purpose  and  under  his  direction,  to  examine 
into  tlie  causes,  circumstances  and  origin  of  all  tires  and 
suspected  attempts  to  set  fire  to  an}^  building  occurring 
within  the  state  to  which  his  attention  may  be  called,  and 
which  in  his  judgment,  require  examination ;  and  in  mak- 
ing said  examinations  the  commissioner  or  his  said  special 
deputy  may,  ^\'lien  in  his  judgment  said  proceedings  are 
necessary,  take  tJie  testimony  on  oatli  of  all  persons  sup- 
posed to  be  cognizant  of  any  facts,  or  to  have  the  means  of 
knowledge  in  relation  to  the  matter  herein  required  to  be 
examined  and  inquired  into,  and  to  cause  the  said  testi- 
mony to  be  reduced  to  writing;  and  when,  in  his  judgment, 
sucli  examination  discloses  that  the  fire  or  attempt  to  cause 
a  fire  was  of  incendiary  orig^in,  the  commissioner  or  said 
special  deputy  may  arrest  the  supposed  incendiary  or 
cause  him  to  be  arrested  and  charged  with  the  crime;  and 
sliall  transmit  a  copy  of  the  testimony  so  taken  to  the 
state's  attorney  for  the  county  or  city  wherein  said  fire  or 
attempt  to  cause  a  fire  occurred;  and  upon  the  request  of 
the  ovrner  or  insurer  of  any  property  destroyed  or  injured 
by  fire,  or  in  which  an  attempt  to  cause  a  fire  may  have 
occurred,  the  said  coinmissioner  or  special  de])uty  shall 
make  a  written  report  to  the  person  requesting  the  same, 
of  the  result  of  the  examination  made  by  him  regarding 
said  pro])erty.  The  commissioner  sliall  annually  report  to 
the  Governor  the  results  of  all  examinations  made  by  him 
and  his  said  deputy. 

Sec.  55.  SprdaJ  Deiputjj  for  Tnrrstif/atioii  of  Fire.s.  Tliat 
in  order  to  carry  out  and  perform  the  powers  and  duties 
coiifci-i'cd  by  the  ])receding  section,  the  commissioner  is 
autlioi-izcd  to  appoint  and  remove  at  pleasure  an  additional 
deputy,  at  such  compensation  as  may  be  approved  by  the 
Hoard  of  T»u])lic  Works,  not  exceeding,  however,  f  2,000  per 
annuiii,  and  sncli  additional  clerical  assistance,  receiving 


99 


sufli  compensation,  as  the  said  commissioner,  with  the  ap- 
proval of  the  Board  of  Public  Works,  may  deem  necessary; 
provided,  however,  that  the  total  compensation  and  ex- 
penses authorized  hj  this  sub-title  shall  not  exceed  in  the 
aggregate  the  sum  of  f4,000  per  annum. 

Sec.  56.  E.rai)i\nat\onf<  of  Per.son.s  uud  I^rcnii.scs.  The 
commissioner  and  liis  said  special  deputy  shall  have  power 
to  subpoena  witnesses,  and  to  compel  their  attendance  be- 
fore him  or  them  to  testify  in  relation  to  any  matter  which 
is,  by  the  provisions  of  this  article,  a  subject  of  inquiry  and 
investigation  by  the  commissioner  or  deputy,  and  shall  also 
have  power  to  cause  to  be  produced  before  him  or  them 
such  papers  as  he  or  thej^  may  require  in  making  such  ex- 
aminations. The  commissioner  and  special  deputy  shall 
be  and  they  are  hereby  autliorized  to  administer  oaths  and 
aflfirmations  to  persons  a])pearing  as  witnesses  before  him 
or  tliem;  and  false  swearing  in  any  matter  of  proceeding 
aforesaid  shall  be  deemed  perjury  and  shall  be  punishable 
as  sucli.  The  commissioner  and  special  deputy  shall  liave 
the  autliority  at  all  times  of  the  day  or  night,  in  perform- 
ance of  the  duties  imposed  by  the  provisions  of  this  act, 
to  enter  u])on  and  examine  any  building  or  premises  wliere 
any  fires  or  attempt  to  cause  tires  shall  have  occurred,  or 
Avliich  at  the  time  may  be  burning,  and  also  the  power  to 
enter  upon  at  any  tinie  an^^  building  adjacent  to  tliat  in 
which  tlie  fire  or  attempt  to  cause  fires  occurred,  should  lie 
deem  it  necessary  in  tlie  proper  discharge  of  his  duties;  and 
they  may,  in  the  exercise  of  their  discretion,  take  full  con- 
trol and  custody  of  the  said  buildings  and  premises,  and 
place  such  person  in  charge  thereof  as  they  may  deem 
proper,  until  their  examination  and  investigation  shall  be 
completed.  The  commissioner  and  special  deputy  shall 
also  have  autliority  to  inspect  public  buildings,  such  as 
sclioolhouses,  churches,  opera  houses,  theatres,  hospitals, 
asylums,  public  halls,  factories,  hotels  and  other  buildings 
of  like  character,  and  to  compel  the  owner  or  ov/ners 
thereof  to  provide  sufficient  fire  escapes  or  other  means  of 
exit  as  he  shall  direct  for  the  benefit  and  safetv  of  the  oc- 


100 

ciipaiits  of  said  biiildiiig-.s,  and  tlie  said  commissiouer  or  liis 
said  special  depaty  sliall  give  thirty  days'  aotioe  to  the 
owner  or  OAvners  of  such  buildings  to  provide  sucli  fire 
escapes  or  otlier  means  of  exit  as  in  Iris  judgment  shall  bo 
deemed  necessary.  Upon  failure  or  refusal  of  tlie  said 
owner  or  owners  of  said  buildings  to  comply  with  the  said 
notice,  the  said  commissioner  or  his  deputy  shall  arrest  or 
cause  the  said  person  or  persons  to  be  arrested,  and  upon 
conviction  before  any  justice  of  the  peace  of  the  city  or 
county  of  the  state  of  Maryland  wherein  tlie  owner  or 
ovrners  reside,  or  the  respective  building  or  buildings  may 
be  located,  they  shall  be  deemed  guilty  of  a  misdemeanor, 
and  shall  pay  the  fine  of  not  more  than  one  hundred  dollars 
or  less  than  twenty-five  dollars  for  each  offense,  and  an 
additional  fine  of  five  dollars  for  each  and  every  day  there- 
after that  such  violation  shall  continue;  and  if  the  accused 
shall  feel  himself  aggrieved  by  tlie  judgment  of  the  justice 
of  the  peace,  he  shall  have  the  right  of  appeal  to  the  circuit 
court  for  the  county  or  the  criminal  court  of  Baltimore 
city  and  have  a  jury  trial;  this  act  shall,  hOAvever,  not  con- 
flict witli  any  existing  laws  now  fully  covering  the  same  in 
any  of  the  towns  or  cities  of  tlie  state  of  Maryland. 

Sec.  57.  Bsports  of  Examinatioiis  of  Fires.  Tlie  commis- 
sioner sliall,  at  the  request  of  the  board  of  fire  commis- 
sioners of  the  City  of  Baltimore,  or  the  county  commission- 
ers of  any  county,  or  the  municipal  authorities  of  any  in- 
corporated city  or  town  in  this  state,  make  to  them  a 
written  report  of  the  examination  made  by  him  or  his  dep- 
uty regarding  any  fire  happening  within  their  respective 
jurisdiction. 

Sec.  58.  Companies!  SJiall  Rcjiort  FhcU  Rr(/<ii-<ruifi 
Lof<xcs.  It  shall  be  the  duty  of  each  fire  insurance  company 
or  association  doing  business  in  this  state,  Avithin  ten  days 
after  the  adjustment  of  any  loss  sustained  by  it,  to  report 
to  the  commissioner,  upon  blanks  furnished  by  him,  such 
infonvatioii  re-.',;n'ding  the  amount  of  insurance,  the  value 


101 

of  the  property  insured,  and  tlie  amount  of  claim  as  ad- 
justed, as  in  the  judgment  of  the  said  commissioner  it  is 
necessary  for  him  to  know. 

Agents  and  Brokers. 

Sec.  59.  Agents'  Licenses.  It  shall  be  unlawful  for  any 
person  to  act  as  agent  or  solicitor  in  this  state  of  any  in- 
surance company  which  has  not  complied  with  all  the 
provisions  of  this  article  applicable  to  it  and  without  first 
luning  applied  for  and  obtained  a  license  or  permit  there- 
for, as  provided  by  this  article,  and  complying  with  all  tlie 
provisions  of  sections  GO,  61,  62  and  63  relating  to  sucli 
agents  'or  solicitors.  Every  such  license  or  permit  shall 
have  specified  upon  its  face  the  name  of  ,tlie  company  for 
which  said  agent  or  solicitor  is  authorized,  a'lkl; limited- , to 
act,  and  all  such  licenses  or  permits  giiall, expire  at  i^ik^- 
night  on  the  31st  day  of  December  foilOAving  tlie  date  i)f 
issue. 

8ec.  60.  Application  for  Agents'  Licenses.  Before  any 
license  or  permit  shall  be  issued  to  any  insurance  agent  or 
solicitor  in  this  state,  tlie  said  agent  or  solicitor  applying 
for  such  license  or  permit  and  the  company  for  which  the 
said  agent  or  solicitor  desires  to  act  as  agent  or  solicitor 
shall  apply  for  such  license  or  permit  on  forms  to  be  pro- 
scribed and  prepared  by  the  insurance  commissioner,  and 
said  company  shall  pay  the  license  or  registration  fees  pre- 
scribed by  this  Article.  The  application  of  each  such  agent 
or  solicitor  shall  be  addressed  to  the  commissioner  in  writ- 
ing and  shall  be  signed  by  him,  shall  set  forth  in  full  the 
name  and  address  of  the  applicant;  that  he  has  not  wilfully 
violated  any  of  the  insurance  laws  of  this  State  during  the 
past  year  and  that  he  will  not  violate  any  such  laws  during 
the  term  of  the  license  applied  for,  if  issued;  that  he  has 
not  dealt  unjustly  with  or  deceived  any  citizen  of  the  State 
or  misrepresented  the  conditions  of  any  insurance  policy 
or  contract ;  whether  or  not  he  has  misappropriated  or  with- 
held from  any  insurance  company  or  general  agent  money 


102 

received  or  collected  by  him  for  said  company  or  general 
agent  under  any  former  employment  as  agent,  broker  or 
solicitor,  whether  or  not  his  license  as  insurance  agent  or 
broker  has  been  declined  or  revoked  in  this  or  any  other 
State  for  a  violation  of  law;  where  and  in  what  business 
engaged  during  the  past  year,  and  shall  give  full  answers 
to  the  following  questions :  Do  3^ou  understand  that  it  is 
against  the  laws  of  this  State  (a)  to  act  as  agent,  broker  or 
solicitor  for  any  company  without  a  license  from  this  de- 
partment, (b)  to  misrepresent  the  conditions  of  any  policy 
contract,  (c)  to  make  any  discrimination  between  citizens 
of  this  State  in  premiums,  or  in  rebating  any  part  of  jDrem- 
iums  or  commissions,  or  twist  or  attempt  to  twist  j)olicies 
by  misrepresentation.  Before  any  license  or  permit  is  is- 
".sjred  to 'si/cJli  ^ijn t  or  solicitor,  the  commissioner  may  make 
inquiry  as 't'o  "tlie, accuracy  of  any  statement  made  in  said 
ii,{^}rjiojLiiiaii,_aaid'']ii.ay  refuseto  issue  any  such  license  if  con- 
vinced tliat  the  applicant  therefor  has  wilfully  misrepre- 
sented any  policy  of  insurance,  or  has  dealt  unjustly  with 
or  wilfully  deceived  any  citizen  of  this  State  in  regard  to 
any  insurance  policy,  or  has  failed  or  refused  to  pay  over 
to  the  company,  or  to  his  principal,  or  other  person  whom 
he  represents  or  has  represented,  or  by  or  for  Avhom  lie  is 
employed  or  acts,  any  money  or  property  in  the  hands  of 
said  agent,  solicitor,  broker  or  broker's  solicitor  belonging 
to  said  company,  firm,  broker,  principal  or  person,  when 
demanded  to  do  so,  or  has  made  any  false  statement,  an- 
swer or  declaration  in  his  application  for  license,  or  has 
wilfully  violated  any  of  the  insurance  laws  of  this  State  or 
any  ruling  of  the  commissianer  which  he  is  by  law  author- 
ized to  make;  provided,  that  any  person  deeming  himself 
aggrieved  by  any  such  refusal  by  the  commissioner  to  grant 
any  such  license  as  aforesaid,  shall  have  the  right  to  appeal 
to  tlie  Superior  Court  of  Baltimore  City  f(U'  a  writ  of 
nunidainus  to  comjjel  the  issuance  of  such  license  in  any 
l>roper  case  where  the  same  has  been  wrongfully  and  im- 
properly withheld. 


103 

j^ec.  61.  Revocaiion  of  License  of  Agent  or  Broker. 
Whenever  the  commissioner  shall  be  satisfied  that  any  in- 
surance broker,. broker's  solicitor, agent  or  solicitor, licensed 
or  registered  by  this  State,  has  wilfully  violated  any  of  the 
iiisurance  laws  of  this  State,  or  has  wilfully  misrepresent- 
ed any  policies  of  insurance,  or  has  dealt  unjustly  with  or 
wilfully  deceived  any  citizen  of  this  State  in  regard  to  any 
insurance  policy,  or  has  failed  or  refused  to  pay  over  to  the 
company  or  to  his  principal  or  other  person  whom  he  repre- 
sents or  has  represented,  or  by  or  for  whom  he  is  employed 
or  acts,  any  money  or  property  in  the  hands  of  said  agent, 
solicitor,  broker  or  broker's  solicitor  belonging  to  said  com- 
pany, firm,  broker,  principal  or  person  when  demanded  to 
do  so,  or  has  violated  any  ruling  of  the  insurance  depart- 
ment which  he  is  by  law  authorized  to  make,  or  upon  con- 
viction of  any  infamous  crime  under  the  laws  of  this  State, 
or  has  been  guilty  of  twisting  or  attempting  to  twist  by  mis- 
representation any  policy  of  insurance  or  has  made  any 
false  statement,  answer  or  declaration  in  his  application 
for  license,  then  and  in  any  such  case,  the  commissioner 
may,  and  it  shall  be  his  duty  to  revoke  the  license  of  such 
broker  or  broker's  solicitor,  or  revoke  the  license  of  any 
agent  or  solicitor  for  all  companies  which  he  represents  in 
this  State  for  such  length  of  time  as  the  commissioner  may 
think  proper;  provided,  liowever,  that  before  the  commis- 
sioner shall  revoke  said  license  he  shall  give  ten  days'  notice 
of  the  charges  in  writing,  to  be  served  upon  said  broker, 
agent  or  solicitor  in  person  or  by  registered  letter  to  his 
last  known  address,  or  by  copy  of  the  charges  left  at  his 
last  known  address,  and  provided  an  opportunity  shall  be 
giA'en  the  said  broker,  broker's  solicitor,  agent,  or  solicitor 
to  be  heard  upon  said  charges,  and  the  said  broker,  brok- 
er's solicitor,  agent  or  solicitor  shall  have  the  right  to  have 
such  revocation  of  license  reviewed  by  the  Superior  Court 
of  Baltimore  City,  when  said  offense  occurred  in  Baltimore 
City,  or  by  the  Circuit  Court  of  any  of  the  counties  of  the 
State  wherein  such  offense  or  offenses  complained  of  occur- 
red. 


104 


Sec.  62.  Payment  of  Conwiission  to  Unauthorized  Agent. 
No  comijany  and  do  agent  or  employee  of  any  comi^anj',  or 
other  person,  whether  such  person  be  a  licensed  broker  or 
otherwise,  shall  directly  or  indirectly,  pay,  except  to  the 
lawful  agent  or  solicitor  of  such  company,  and  to  him  solely 
upon  the  premiums  on  policies  issued  by  the  companj^  for 
wliich  he  ma,y  be  licensed  agent  or  solicitor,  or  to  an  insur- 
ance broker  licensed  by  the  State  of  Maryland,  any  commis- 
sion, reward,  or  rebate  in  consideration  of  procuring,  or  in- 
fluencing others  to  procure,  insurance  from  such  company 
or  person,  or  collect  or  agree  to  collect  from  any  person, 
whether  or  not  the  same  may  be  the  owner  of  the  property 
insured,  or  his  agent,  or  other  person,  any  amount  less  than 
that  expressed  in  the  policy  or  policies  as  being  the  j)rem- 
iums  therefor. 

Sec.  63.  Resident  Agent.  No  companj^  authorized  to 
transact  business  in  this  State,  and  no  person,  resident  or 
nonresident,  shall  write  any  policy  of  insurance,  or  assume 
any  liabilit}^  in  the  matter  of  insurance  upon  any  property, 
real  or  personal,  situated  in  this  State,  unless  such  policy, 
certificate  or  otlier  evidence  of  liability  assumed  by  said 
conipany  or  person  shall  have  been,  previous  to  delivery, 
signed  or  countersigned  by  an  officer  or  agent,  resident  in 
this  State,  authorized  b}'  law  to  sign  such  policy'  or  con- 
tract; provided,  however,  that  policies  issued  to  railway 
corporations  insuring  the  rolling  stock  and  other  movable 
property  of  said  road,  and  those  insuring  the  liability  of 
such  railroads  as  common  carriers,  shall  be  subject  to  the 
re(iuirement  that  they  shall  be  signed  by  the  resident  agent 
in  cases  only  where  more  than  one-half  the  trackage  of  the 
roads  o])erated  by  such  railway  companies  is  situate  in  the 
State  of  jNIaryland.  Ever^^  company  or  person,  resident  or 
non-resident,  engaged  in  business  in  this  State,  shall  pay 
to  its  legally  licensed  agent  in  the  State  of  Maryland,  for 
signing  or  countersigning  any  policy,  certificate  or  other 
evidence  of  liability  assumed  by  said  company  or  person, 
the  same  rate  and  amount  of  commission  as  if  such  policy, 
certificate  or  other  evidence  of  liability,  had  been  issued 


105 

through  said  agent  residing  in  the  State  of  Maryland;  and 
110  agent  shall  sign  or  countersign  any  policy,  certificate  or 
other  eyidence  of  liability,  upon  any  property  situated  in 
this  State,  for  an  amount  less  than  the  coniinission  allowed 
on  any  policy,  certificate  or  other  eyidence  of  liability'  is- 
sued tltrougli  an  ajjent  residing  in  this  State.  The  premiums 
on  all  policies  so  signed  or  countersigned  shall  be  included 
in  the  report  of  gross  premiums  required  to  be  made  to  the 
Insurance  Commissioner  by  all  companies  not  organized 
under  the  laws  of  this  State. 

Sec.  04.  lustiirdiice  lirohcr.  All  licenses  for  the  purpose 
of  conducting  the  occupation  or  business  of  insurance 
broker  or  broker's  solicitor  shall  be  granted  by  the  State 
Insurance  Commis.sionor  of  Maryland,  and  all  such  licenses 
granted  by  said  commissioner  sliall  expire  on  the  1st  day  of 
]May  thereafter.  Whoeyer,  for  compensation,  acts  or  aids 
in  any  manner  in  negotiating  contracts  of  insurance  or  re- 
insurance or  placing  risks  or  effecting  insurance  or  rein- 
surance for  a  person  other  than  himself,  and  not  being  a 
duly  appointed  solicitor,  agent  or  otficer  of  the  company  in 
which  such  insurance  or  reinsurance  is  effected,  and  not  be- 
ing a  duly  licensed  and  qualified  broker's  solicitor  as  de- 
fined in,  and  in  conformity  with,  the  proyisions  of  Section 
66  of  this  Article,  shall  be  deemed  an  insurance  broker. 

Sec.  65.  Broker's  License.  Any  natural  person,  bona  fide 
copartnership  or  corporation  applying  therefor  as  herein- 
after set  forth,  and  paying  to  the  Insurance  Commissioner 
the  sum  of  one  hundred  dollars  for  the  use  of  the  State,  and 
an  additional  sum  of  one  dollar  as  a  fee  to  the  said  commis- 
sioner for  issuing  said  license,  may  obtain  a  license  for 
carrying  on  the  business  of  an  insurance  broker;  proyided, 
howeyer,  that  any  natural  person,  bona  fide  copartnership, 
or  corporation  residing  in  any  of  the  counties  of  this  State, 
may,  upon  payment  of  a  fee  of  twenty-fiye  dollars  for  the 
use  of  the  State,  and  an  additional  sum  of  one  dollar  as  a 
fee  to  the  said  commissioner  for  issuing  said  license,  ob- 
tain a  license  to  act  as  broker  as  to  risks  situated  in  the 


106 

county  only  within  wliicli  lie,  they  or  it  may  reside.  A  li- 
cense issued  to  a  copartnership  or  corporation  shall  au- 
thorize only  those  members  of  the  copartnership,  not  ex- 
ceeding- three  in  number,  who  are  specified  in  the  license,  or 
those  officers,  agents  and  employees  of  the  corporation,  not 
exceeding  three  in  number,  who  are  specified  in  the  license, 
to  act  for  the  said  copartnership  or  for  the  said  corporation 
thereunder.  The  Insurance  Commissioner  shall  from  time 
to  time,  upon  application,  and  payment  of  an  additional 
sum  of  fifty  cents  in  each  case  as  a  fee  to  the  insurance  com- 
missioner, change  the  designations  of  members  of  copart- 
nerships and  of  officers,  agents  and  emploj^ees  of  corpora- 
tions in  licenses  issued  under  this  section  to  copartnership* 
and  corporations.  Every  application  for  a  license  under 
this  section  shall  be  addressed  to  the  Insurance  Commis- 
sioner in  writing,  sliall  set  forth  in  full  the  name  and  ad- 
dress of  such  applicant  and  the  name  and  address  of  each 
person  who  proposes  to  act  under  a  license  issued  as  afore- 
said to  an3^  copartnership  or  corporation,  that  each  such  ap- 
plicant or  person  proposing  to  act  under  such  license  has 
not  wilfully  violated  any  of  the  insurance  laws  of  this  State 
during  the  past  year  and  that  he  will  not  violate  any  such 
law  during  the  term  of  the  license  applied  for  if  issued; 
that  he  has  not  dealt  unjustl^^  with  or  deceived  any  citizen 
of  this  State  or  misrepresented  the  conditions  of  any  in- 
surance policy  or  contract;  whether  or  not  he  is  indebted 
to  any  insurance  company  or  general  agent  by  virtue  of  any 
contract  as  former  agent  or  broker,  whether  or  not  his  li- 
cense as  insurance  agent  or  broker  has  been  declined  or  re- 
voked in  this  or  any  other  State  for  a  violation  of  law; 
where  and  in  what  business  engaged  during  the  past  year, 
and  sliall  give  full  answers  to  the  following  questions:  Do 
you  understand  that  it  is  against  the  laws  of  this  State  (a) 
to  act  as  a  broker  for  any  company  without  license  from 
this  (h'jtartnieiit,  (b)  to  mi'srepresent  the  conditions  of  any 
lH)li(y  contract,  (c)  to  make  any  discrimination  between 
citizens  of  this  State  in  premiums,  or  in  rebating  any  port 
of  premiums  or  commissions,  or  to  twist  or  attempt  to 


107 

twist,  policies  hj  misrepresentation.  Said  application  and 
declaration  shall  be  signed  b}'  the  person,  a  member  of  the 
copartnership,  or  a  dul}'  authorized  oiiftcer  of  the  corpora- 
tion applying-  as  the  case  may  be.  If  any  such  license  shall 
be  it>sued  for  any  portion  of  any  year,  a  ratable  sum  shall 
be  charged  therefor  up  to  the  first  day  of  May  next  succeed- 
ing the  date  of  such  application. 

Sec.  ()().  Broker-s  Solicitor.  Any  person  who  shall  be 
a  bona  fide  emidoyee  of  a  duly  licensed  and  qualified  broker 
and  not  duly  operating  under  a  broker's  license  in  conform- 
ity with  tlie  provisions  of  Section  65  of  this  Article,  and 
who,  for  compensation,  whether  by  way  of  salary  or  com- 
mission, or  botli,  shall  solicit  on  behalf  of  and  in  the  name 
of  his  said  employer,  and  not  in  his  own  name,  or  in  any 
n)anner  aids  his  said  employer  in  negotiating  contracts  of 
insurance  or  reinsurance  in  the  name  of  his  said  employer, 
is  hereby  designated  a  broker's  solicitor  and  shall  be  deem- 
ed to  be  such  for  the  purposes  of  this  Article.  No  person 
shall  act  in  any  manner  or  perform  any  of  the  duties  or 
functions  of  such  broker's  solicitor  until  api:)licati(m  for  a 
license  therefor  shall  have  been  made  both  by  said  broker's 
solicitor  and  by  his  employer  on  application  forms  provid- 
ed by  the  Insurance  Commissioner,  and  duly  signed  hy  said 
broker's  solicitor  and  by  his  said  employer,  and  there  shall 
have  been  issued  b}'  the  Insurance  Commissioner  a  license 
to  act  as  such  broker's  solicitor,  for  which  license  there 
shall  be  paid  to  the  Insurance  Commissioner  the  sum  of 
twenty-five  dollars  by  or  for  each  such  broker's  solicitor. 
Said  license  shall  bear  the  name  of  the  broker's  solicitor  to 
whom  issued  and  of  the  employer  for  whom  he  is  author- 
ized to  act  and  shall  authorize  said  broker's  solicitor  named 
therein  to  solicit  insurance  and  reinsurance  in  the  name  of 
his  said  employer,  but  not  in  his  own  name,  or  in  the  name 
of  any  other  person,  firm  or  corporation,  and  further  to  aid 
in  any  proper  and  lawful  manner  his  said  employer  in  ne- 
gotiating contracts  of  insurance  and  reinsurance,  in  the 
name  of  his  said  employer,  but  shall  not  authorize  or  per- 
mit said  broker's  solicitor  to  act  in  or  use  his  own  name  in 


108 

soliciting  or  negotiating  any  contracts  of  insurance  or  re- 
insurance or  in  any  renewal  or  renewals  of  any  such  con- 
tracts, or  to  deliver  any  policy  or  bill  to  any  assured  or 
collect  any  premium  of  insurance  in  his  own  name  or  in 
any  other  manner  than  in  the  name  of  and  as  the  agent  or 
employee  of  his  said  employer.  The  broker  for  whom  any 
such  solicitor  shall  act  under  such  license  may  -place  any 
insurance  procured  by  or  through  said  solicitor  in  any  com- 
pany and  in  the  same  manner  and  to  tlie  same  extent  as  if 
said  business  had  been  procured  or  negotiated  directly  by 
said  broker  employing  said  solicitor. 

Sec.  67.  Non-Resident  Brokers.  Any  duly  authorized 
broker  of  any  other  State  of  the  United  States  or  of  the 
District  of  Columbia,  residing  outside  of  this  State,  may 
negotiate  any  contract  of  insurance  within  this  State  or  on 
property  located  Avithin  this  State  to  the  same  extent,  and 
on  the  same  terms  and  upon  the  payment  of  the  same  fees 
as  are  or  shall  be  required,  demanded  or  exacted  by  any 
Buch  State  or  the  District  of  Columbia,  or  from  citizens  of 
this  State  negotiating  or  transacting  a  like  business  in  any 
such  State  or  the  District  of  Columbia. 

Sec.  G8.  Penalties  for  Violation  of  Sections  64,  65,  66 
and  67.  Any  person  who  shall  use  or  exercise  within  this 
State  the  business  or  occupation  of  an  insurance  broker  or 
broker's  solicitor,  as  the  case  may  be,  without  having  pro- 
cured a  license  therefor,  as  required  by  Sections  64,  65,  66i 
and  67  of  this  Article,  and  each  person  who  employs,  and 
each  member  of  any  partnership,  and  each  offtcer  of  any 
corporation  having  authority  to  employ  agents,  clerks  and 
solicitors,  who  shall  emploj^  or  permit  the  emplo^anent  or 
receive  or  accept  the  services  of  any  broker's  solicitor  until 
a  license  in  each  such  case  shall  have  been  duly  issued  as 
provided  in  Section  66,  sliall  be  deemed  guilty  of  a  misde- 
meanor and  shall  be  subject  to  a  penalty  of  five  hundred 
dollars  for  each  such  offense,  one-half  for  i\\e  use  of  the 
Slate  and  the  other  half  to  the  informer. 


109 

Sec.  G9.  Shei-ijfs  IShall  FuriiisJi  List  of  Lisunnice  Brok- 
ers. It  shall  be  the  duty  of  the  sheriff  of  the  city  of  Balti- 
more and  the  sheriff  of  each  county  throughout  the  state  to 
furnish  the  Insurance  Commissioner,  prior  to  the  lirst  day 
of  May  in  each  and  every  year,  the  names  of  all  persons 
conducting  the  business  of  "Insurance  Broker''  within  the 
respective  jurisdiction  of  each  of  said  sheriffs,  for  which  he 
shall  receive  a  fee  of  fifty  cents  for  each  license  issued  by 
the  Insurance  Commissioner. 

Fire  Insurance. 
Sec.  70.  Insurance  of  Property  bi/  Guardknis,  etc.  Any 
domestic  company  may  insure  the  property,  real,  personal 
or  mixed,  which  any  married  woman  may  own  jointly  or 
in  severalty,  in  the  same  manner  as  if  she  were  femme  sole; 
and  any  guardian  may,  with  the  assent  of  the  Orphans' 
Court  by  which  he  shall  have  been  appointed,  insure  in  any 
domestic  company  any  property  which  the  ward  or  wards 
of  such  guardian  may  own,  either  jointly  or  in  severalty, 
and  such  insurance  shall  have  the  same  effect  in  all  re- 
spects as  if  the  minor  wliose  property  is  thus  insured  were 
of  full  age,  and  had  made  such  insurance  himself. 

Sec.  71.  Unauthorized  Insurance.  All  persons  obtain- 
ing insurance  on  property  situate  in  this  State  (owned  by 
individuals  or  firms  resident  in  this  State,  or  corporations 
incorporated  under  the  laws  of  this  State),  against  fire, 
lightning  or  tornado,  from  companies,  associations,  firms 
or  corporations  not  authorized  to  transact  business  in  this 
State,  shall  file  with  the  Insurance  Commissioner  a  state- 
ment or  declaration  setting  forth  the  name  of  the  company, 
number  of  policy,  amount  of  insurance,  rate,  premium  and 
description  of  property;  shall  be  required  to  pay  a  tax 
thereon  of  five  per  cent,  of  the  premium  paid  on  such  poli- 
cies to  the  said  commissioner,  and  shall  further  pay  a  fee 
to  said  Insurance  Commissioner  of  one  dollar  on  each 
policy  for  making  a  record  of  the  said  statement  or  declara- 
tion, which  record  shall  be  kept  for  the  private  information 
of  the  insurance  department  of  this  State,  and  shall  not  be 
a  public  record. 


110 

Any  insurance  broker  placing  insurance  on  property 
situate  in  this  State  against  fire,  lightning  or  tornado,  in 
companies  not  authorized  to  transact  business  in  this  State, 
shall,  between  the  first  and  tenth  days  of  each  month,  sub- 
mit in  writing  to  the  commissioner  a  true  list  of  such  i)oli- 
cies  of  insurance  so  placed  by  him  in  the  preceding  month, 
together  witli  a  statement  or  declaration  setting  forth  the 
information  above  required.  Such  information  shall  be 
kept  for  the  private  information  of  the  insurance  depart- 
ment, and  shall  not  be  a  public  record. 

Upon  tlie  failure  of  any  broker  to  so  file  the  true  list, 
statement  and  declaration  herein  specified,  within  the  limit 
of  time  herein  mentioned,  the  Insurance  Commissioner 
may  suspend  his  or  their  license  for  a  period  not  exceeding 
ninety  days. 

Sec,  72.  When  Tax  Need  Not  Be  Paid.  Whenever  any 
person  or  firm  resident  in  this  State,  or  corporation  incor- 
porated under  the  laws  of  this  State,  shall  file  with  the  In- 
smaiMe  Coiiiuiissiorer  an  affidavit  that  said  person,  firm 
or  corporation  is  unable  to  obtain  in  companies  legally  au- 
thorized to  do  business  in  this  State,  insurance,  or  a  suf- 
ficient amount  thereof,  on  property  situate  in  this  State 
owned  by  said  person,  firm  or  corporation,  then  the  com- 
missioner shall  issue  a  license  to  such  person,  firm  or  cor- 
poration authorizing  the  procurement  of  insurance  in  fwn- 
admitted  companies  or  associations  to  tlie  extent  of  the  in- 
surance desired;  and  such  person,  firm  or  corporation  shall 
not  be  required  to  pay  the  tax  imposed  by  the  preceding 
section,  but  shall  be  required  to  pay  said  Insurance  Com- 
missioner a  fee  of  one  dollar  on  each  policy  so  obtained; 
and  said  commissioner  shall  make  a  record  thereof  in  the 
book  mentioned  in  the  preceding  section,  showing  name  of 
company,  number  of  policy,  amount  of  insurance,  rate, 
premium  and  date  of  expirati(m  of  policy;  and  in  case  of 
damage  to  or  loss  by  fire,  lightning  or  tornado  of  any  prop- 
erty so  insured,  the  said  unauthorized  company  is  hereby 
nuthorized  through  its  agent  or  agents  to  enter  this  State 


Ill 

for  the  i>urpo8e  of  ad j listing  any  such  loss  or  damage  sus- 
tained under  said  policies,  but  not  to  solicit  insurance  iu 
such  unauthorized  companies. 

Sec.  73.  Stamping  Policies  in  Unauthorized  Companies. 
It  shall  be  the  duty  of  the  commissioner  to  stamp  all  poli- 
cies issued  iu  non-admitted  companies  "Unauthorized  Com- 
pany, Tax  paid,"  or  "Unauthorized  Company,  no  Tax." 
Provided,  however,  tliat  railway  comx^anies  and  other  com- 
mon carriers  engaged  in  inter-state  commerce,  may  place 
insurance  without  complying  with  the  requirements  of  this 
section  and  sections  71  and  72. 

Sec.  7-1.  StampiiKj  Policies  in  Authorized  Companies. 
All  policies  of  insurance  against  loss  or  damage  to  property 
in  this  State  from  lire,  lightning  or  tornado  issued  by  com- 
panies authorized  to  transact  such  business  in  this  State, 
shall  have  plainly  nuirked  or  stamped  in  indelible  ink  on 
each  policy  the  words  following,  "Authorized  to  do  busi- 
ness in  the  State  of  Maryland,"  to  which  shall  be  affixed  a 
facsimile,  of  tlie  signature  of  the  insurance  commissioner. 
The  commissioner  shall  furnish  stamps  for  the  purpose 
herein  prescribed  at  a  cost  not  to  exceed  two  dollars  for 
each  stamp,  to  be  paid  by  all  such  authorized  companies. 

Sec.  75.  Penalties  for  Violation  of  Sections  71,  72,  73 
and  74.  Any  person  who  shall,  with  intent  to  avoid  the  pay- 
ment of  the  tax  on  insurance  in  unauthorized  companies  as 
provided  by  Section  72,  make  false  affidavit,  shall  be  guilty 
of  perjury  and  shall  be  proceeded  against  and  punished  as 
provided  by  the  statutes  of  this  State  in  relation  to  the 
crime  of  perjury,  and  any  policy  of  insurance  obtained  by 
means  of  such  false  affidavit  shall  be  void,  and  the  license 
or  authority  for  such  unauthorized  insurance  shall  be  can- 
celled by  the  commissioner.  The  obtaining  or  possession  of 
any  such  policy  insuring  against  loss  by  fire,  lightning  or 
tornado  on  property  situated  in  this  State  issued  by  com- 
panies not  authorized  to  do  business  in  this  State,  without 
complying  with  the  provisions  of  Sections  71,  72,  78  and  74 
shall  be  a  misdemeanor,  and  any  person  convicted  thereof 


112 


shall  be  subject  to  a  fiue  not  less  than  one  hundred  dollars 
or  more  than  one  thousand  dollars,  or  imprisonment  in  the 
jail  of  Baltimore  City  or  of  the  county  of  this  State  where 
such  offense  ma}'  be  committed,  for  a  period  not  less  than 
one  month  or  more  than  six  months,  in  discretion  of  the 
court  having  jurisdiction.  Any  person  who  shall  act  as 
intermediary  in  any  manner  in  procuring  or  delivering  any 
poiic}'  of  insurance  in  violation  of  any  of  said  sections  71, 
72,  73  or  74  shall  be  subject  to  all  the  penalties  of  this  sec- 
tion above  enumerated. 

Sec.  76.  Reinsurance  Reserve.  Every  company  doing  a 
fire  or  inland  insurance  business  in  this  State,  shall  be 
charged  with  and  maintain  as  any  other  liability,  an  un- 
earned or  reinsurance  reserve  for  all  unexpired  fire  and  in- 
land risks  at  the  rate  or  in  the  proportion  of  fifty  per 
centum  of  the  premiums  written  or  renewed  on  all  unex- 
pired risks  that  have  one  year  or  less  to  run,  and  pro  rata 
for  all  premiuiiis  written  or  renewed  on  risks  that  have 
more  than  one  year  to  run.  Every  company  doing  a  marine 
insurance  business  shall  be  charged  with  a  reinsurance  re- 
serve as  above  at  the  rate  of  sixty  per  centum  of  all  prem- 
iums written  or  renewed  on  all  marine  risks  for  one  j-ear  or 
covering  more  than  one  voyage,  not  terminated,  and  one 
hundred  per  centum  of  all  premiums  written  or  renewed  on 
policies  less  than  one  year,  not  terminated.  The  reinsur- 
ance reserve  on  the  business  of  companies  organized  under 
the  laws  of  foreign  governments,  shall  be  calculated  only 
upon  the  business  of  such  companies  in  the  United  States 
of  America,  and  the  assets  of  such  companies  held  and  in- 
vested in  the  United  States  of  America  only  shall  be  recog- 
nized as  constituting  the  admitted  assets  of  such  companies 
for  reserve  purposes. 

Sec.  77.  Impairment  of  Capital.  Having  charged  the 
company  the  re-insurance  reserve  as  above  determined,  for 
fire,  inland  and  marine  insurance,  and  adding  thereto  all 
debts  and  claims  against  it,  the  commissioner  shall,  in  case 
lie  finds  the  capital  stock  of  the  company  impaired  to  the 


113 

exteut  of  twenty-five  per  cent.,  give  notice  to  the  company 
to  make  good  its  whole  capital  stock  within  sixty  clays;  and 
if  this  is  not  done  he  shall  require  the  company  to  cease  to 
do  new  business  within  this  State;  and  shall  thereupon,  in 
case  the  company  is  organized  under  the  authority  of  tiiis 
State,  immediately  institute  such  legal  proceedings  as  are 
necessarj^  to  protect  the  rights  of  all  persons  in  said  com- 
pany. 

Sec.  78.  Lloijds  Insurance.  Associations  of  individuals, 
citizens  of  the  United  States,  whether  organized  within  this 
State,  or  elsewhere  within  the  United  States,  formed  upon 
the  plan  known  as  Lloyds,  whereby  each  associate  under- 
writer becomes  liable  for  a  proportionate  part  of  the  whole 
amount  insured  by  the  policy,  may  be  authorized  to  trans- 
act insurance  other  than  life  in  this  State,  upon  the  fol- 
lowing conditions:  That  any  such  association  organized  in 
tliis  State  may  be  permitted  to  tran.sact  the  insurance  busi- 
ness upon  the  same  terms  and  conditions  as  are  by  the  laws 
of  this  State  imposed  upon  an  insurance  company  organ- 
ized under  the  laws  of  this  State,  and  any  such  association 
organized  in  any  other  State  of  the  United  States  may  be 
permitted  to  transact  its  business  in  this  State  upon  the 
same  terms  and  conditions  as  are  by  the  laws  of  this  State 
imposed  upon  an  insurance  company  incorporated  in  the 
State  where  such  association  was  organized. 

Life,  Accident  and  Health  Insurance. 

Sec.  79.  Life  Insurance  Companies.  Any  company  mak- 
ing any  engagement  for  the  payment  of  money  or  other 
benefits  in  the  event  of  sickness,  accident  or  death,  or  other 
contingency,  either  to  the  member,  policy  or  certificate 
holder,  or  by  whatsoever  name  the  same  may  be  known,  or 
to  their  families  or  representatives,  or  entering  into  any 
contract  or  agreement  in  which  the  chances  or  probabilities 
of  the  duration  of  life,  or  the  rate  of  mortality  or  hazard  of 
occupation  are  in  any  way  involved  as  an  element  or  con- 
dition of  such  contract  or  agreement,  shall  be  deemed  and 
taken  to  be  a  life  insurance  company  within  the  meaning 


114 

of  this  Article,  and  shall  be  subject  to  all  the  requirements 
of  law  applicable  to  said  life  insurance  companj^  Every 
domestic  life  insurance  company  is  hereb}'  also  authorized 
to  insure  individuals  against  accident,  and  to  grant,  pur- 
chase, or  dispose  of  annuities,  unless  it  shall  be  otherwise 
provided  in  its  charter  or  by-laws.  • 

Sec.  80.  Valuation  of  Policies.  As  soon  as  practicable  in 
each  year,  the  actuary  shall,  under  the  supervision  of  the 
comndssioner,  calculate  the  net  value  on  the  thirty-flrst  day 
of  December  of  the  previous  year,  of  all  the  policies  and  ad- 
ditions thereto,  and  all  obligations  for  the  payment  of  an- 
nuities in  force  on  that  day  of  each  life  insurance  company 
doing  business  in  this  State  organized  by  authority  of  this 
State;  and  every  other  life  insurance  company  doing  busi- 
ness in  this  State,  that  shall  fail  to  furnish  him,  as  herein- 
after provided,  from  the  Insurance  Commissioner  of  the 
State  by  whose  autliority  the  company  was  organized,  or 
of  the  State  in  which  it  maj  elect  to  have  its  policies  valued 
and  its  deposits  made,  in  case  the  company  is  chartered  by 
the  (Jovernment  of  the  United  States,  or  by  any  foreign 
government,  or  by  any  State  not  having  an  insurance  de- 
partment, a  certificate  giving  the  net  value  of  all  policies 
in  force  in  the  company  on  the  thirty-first  day  of  Decem- 
ber, in  the  year  nineteen  hundred  and  two,  be  based  upon 
the  American  Experience  Table  of  Mortality,  and  four  and 
one-half  per  cent,  interest  per  annum;  and  for  all  policies 
issued  sul)se(pient  to  said  thirty-first  day  of  December,  in 
the  year  nineteen  hundred  and  two,  and  on  or  before  the 
thirty-first  day  of  December,  in  the  year  nineteen  hundred 
and  eigliteen,  upon  the  Actuaries  Table  of  Mortality,  and 
four  per  cent,  interest  per  annum;  and  for  all  policies,  ex- 
cept industrial,  issued  subse(]uent  to  the  thirty-first  day  of 
December,  in  the  year  nineteen  hundred  and  eighteen,  upon 
the  American  Experience  Table  of  Mortality  and  three  and 
one-half  ])er  cent,  interest  per  annum  ;  provided,  that  the  In- 
surance Oommissioner  shall,  upon  the  request  of  any  com- 
pany, cause  all  policies  of  such  company  issued  subseqtient 
to  the  thirty-first  day  of  December,  in  the  year  nineteen 


115 

hundred  and  eij^hteeu,  to  be  valued  in  accordance  with  the 
terms  of  the  policy  contract,  but  in  no  case  to  be  less  than 
that  determined  by  the  one  year  term  method  of  valuation, 
as  hereinafter  modified,  (m  the  basis  of  the  American  Ex- 
perience Table  of  .Mortality  and  three  and  one-half  per  cent, 
interest  per  annum.  If  the  premium  charged  for  term  in- 
surance under  a  limited  payment  life  preliminary  term 
policy  providing  for  the  payment  of  all  premiums  thereon 
in  less  tlian  twenty  years  from  the  date  of  the  policy,  or 
under  an  endowment  preliminary  term  policy,  exceeds  that 
cluirged  for  like  insurance  under  twenty  payment  life  pre- 
linunary  term  policies  of  the  same  company,  the  reserve 
thereon  at  the  end  of  any  year,  including  the  first,  shall  not 
be  less  than  the  reserve  of  a  twenty  payment  life  prelimi- 
nary term  policy  issued  in  the  same  year  and  at  the  same 
age,  together  with  an  amount  which  shall  be  eiiuivaleut  to 
the  accumulation  of  a  net  level  premium  reserve  at  such 
time  of  sucli  a  limited  payment  life  or  endowment  policy. 
The  premium  i)ayment  period  is  the  period  during  wliich 
premiums  are  concurrently  payable.  Tlie  value  of  all  poli- 
cies which  contain  any  promise  or  agreement  for  the  pur- 
chase of  the  policy  at  any  date  prior  to  its  maturity  or  its 
termination  by  death  for  a  sum  in  excess  of  the  value  of  the 
policy  at  such  date  determined  according  to  the  standard 
of  valuation  herein  prescribed  for  such  policy,  shall  be  cal- 
culated in  such  manner  and  upon  such  assumption  as  to 
rate  of  interest  and  mortality,  that  the  value  of  the  policy 
so  calculated  shall  at  no  time  be  less  than  the  amount  stipu- 
lated therein,  to  be 'paid  upon  surrender  of  the  policy  at 
the  date  then  attained,  and  for  the  purpose  of  such  valua- 
tion the  standard  adopted  by  the  company  for  the  value  of 
sucli  obligation  may,  if  adequate,  be  employed. 

In  the  determination  of  the  values  of  the  policies,  the 
calculations  may  be  made  either  seriatim  or  of  the  policies 
in  groups,  using  approximate  averages  for  fractions  of  the 
year;  and  in  all  certificates  of  valuations  issued  by  the  In- 


surance  Commissioner  or  accepted  by  him  under  the  pro- 
visions of  this  section,  the  basis  upon  which  the  valuation 
has  been  made  shall  be  expressed. 

All  policies  of  life  insurance  issued  in  this  State  shall 
contain  a  clause  specifying  the  basis  upon  which  the  re- 
serve is  calculated;  and  every  policy  of  life  insurance  is- 
sued in  til  is  State  shall  have  legibly  inscribed  at  the  foot  of 
tlie  first  page  a  brief  description  of  the  true  nature  of  the 
policy.  The  legal  minimum  standard  for  the  valuation  of 
industrial  policies  issued  subsequent  to  the  thirty-first  day 
of  December,  in  the  yedv  nineteen  hundred  and  eighteen, 
sliall  be  the  American  Experience  Table  of  Mortality  with 
interest  at  three  and  one-half  per  centum  per  annum. 

The  commissioner  may,  in  his  discretion,  upon  the  re- 
(luest  of  any  life  insurance  company  so  reiDorting  to  him, 
cause  the  net  value  of  all  or  any  number  of  the  policies  in 
force  in  such  company  to  be  calculated  upon  a  higher  basis 
of  reserve  tlian  that  prescribed  above  by  the  assumption  of 
a  lower  rate  of  interest  than  that  prescribed,  or  the  as5?ump- 
tion  of  a  higiier  rate  of  mortality  by  the  substitution  of  the 
Actiuiries'  Table  for  the  American  Experience  Table  of 
jMortality  or  otherwise  as  the  circumstances  of  the  case  may 
re(]uire;  provided,  that  in  no  case  shall  the  net  value  so 
ascertained  and  taken  as  a  basis  of  reserve  be  less  tliau  that 
determined  by  the  standard  of  valuation  above  prescribed; 
and  in  every  certificate  of  the  valuation  of  policies  issued 
by  Ihe  commissioner  the  basis  upon  which  the  valuation  is 
calculated  shall  be  stated. 

The  commissioner  shall  accept  the  valuation  made  by  the 
Insurance  Commissioner  of  the  State  ynder  whose  author- 
ity a  life  insurance  company  is  organized,  or  that  of  the 
State  in  which  it  may  elect  to  have  its  policies  valued,  when 
such  valuations  have  been  proi)ei'ly  made  on  sound  and 
recognized  principles,  and  legal  basis  not  less  than  that  pre- 
scribed above;  provided,  that  the  company  shall  furnish  to 
the  Insurance  rommissioner  of  this  State  a  certificate  from 
the  Insurance  Commissioner  of  such  State,  setting  forth 
the  value,  calculated  on  the  data  designated  above,  of  all 


117 

the  policies  in  force  in  the  company  on  the  previous  thirty- 
first  day  of  December,  and  stating  that  the  said  company 
is  fully  authorized  to  do  business  in  its  OAvn  State.  EvQi-y 
life  insurance  comjiany  doing  business  in  this  State  during 
the  year  for  which  the  statement  is  made  that  fails  prompt-" 
ly  to  furnish  the  certificate  aforesaid  shall  be  required  to 
make  a  full  detailed  list  of  its  policies  and  securities  to  the 
Insurance  Commissioner  of  this  State;  who  shall  there- 
upon cause  the  same  to  be  valued  at  the  expense  of  said 
company. 

Sec.  81.  Valuation  of  Policies  on  Lives  of  Infants.  An^' 
company  granting  insurance  on  the  lives  of  persons  under 
the  age  of  ten  years,  and  doing  business  in  the  State  of 
Maryland,  or  issuing  policies  on  the  lives  of  residents  of 
this  State,  must  value  all  of  its  policies  issued  on  the  lives 
of  persons  under  tlie  age  of  ten  years,  in  accordance  with 
the  general  legal  rules  for  tlie  valuation  of  life  insurance 
policies  based  on  the  mitrtality  table  known  as  Farr's  No. 
3,  for  males;  provided,  that  in  no  case  shall  the  valuation 
for  the  said  policies  on  the  lives  of  persons  under  ten  years 
of  age  be  less  than  eight-tenths  of  the  weekly  gross  or  office 
premiums  thereon,' with  no  credit  for  deferred  net  prem- 
iums. 

Sec.  82.  Valuation  of  Securities.  All  bonds  and  other 
evidences  of  debt  held  by  any  life  insurance  corporation 
authorized  to  do  business  in  this  State,  may,  if  amply  se- 
cured and  not  in  default  as  to  principal  or  interest,  be 
valued  for  any  and  all  purposes  for  which  valuation  may 
be  made,  or  is  required  to  be  made  under  the  laws  of  this 
State,  as  follows : 

If  purchased  at  par,  at  the  par  value. 

If  purchased  above  or  below  par,  on  the  basis  of  the  pur- 
chase price  adjusted  so  as  to  bring  the  value  to  par  at  ina- 
turity,  and  so  as  to  yield  meantime  the  effective  rate  of  in- 
terest at  which  the  purchase  was  made;  proAided,  that  the 
purchase  price  shall  in  no  case  be  taken  at  a  higher  figure 
than  the  actual  market  value  at  the  time  of  purchase ;  and 


118 


provided,  further,  that  the  commissioner  shall  have  full  dis- 
cretion in  determining  the  method  of  calculating  values  ac- 
cording to  the  foregoing  rule,  and  the  values  found  by  him 
in  accordance  with  such  method  shall  be  final  and  binding; 
l.rovided  also,  that  any  such  corporation  may  return  such 
bonds  or  otlier  evidences  of  debt  at  their  market  value  or 
their  book  value,  but  in  no  event,  at  an  aggregate  value  ex- 
ceeding the  foregoing  rule;  and  provided  further,  that  all 
securities,  except  those  having  a  fixed  term  and  rate  and 
not  in  default  as  to  principal  or  interest,  shall  be  valued 
according  to  the  provisions  of  the  laws  of  this  State,  or  the 
estal)lished  practice  in  this  State  existing  at  the  time  of  the 
passage  of  this  Act.  I>ut  this  Act  shall  not  be  constructed 
to  appl^'  to  an}^  insurance  corporation  authorized  to  do 
business  in  this  State  which  shall  not  elect  to  value  its 
bonds  and  other  evidences  of  debt  by  amortization  as  liere- 
in  provided. 

Sec.  83.  In. 'durance  For  Wife's  SoJe  Use.  Any  married 
woman  by  herself  and  in  her  name,  or  in  the  name  of  any 
other  person,  with  his  assent,  as  her  trustee,  may  insure  in 
any  life  insurance  company  formed  under  the  provisions 
of  this  Article,  for  her  sole  use,  the  life  of  her  husband  for 
any  definite  period  or  for  the  term  of  his  natural  life;  and 
in  case  she  shall  survive  her  husbnad,  the  sum  or  net 
amount  of  the  insurance  becoming  due  and  payable  by  the 
terms  of  the  policy  shall  be  payable  to  her  and  for  her. own 
use,  free  from  the  claims  of  the  representatives  of  the  hus- 
band or  of  any  of  his  creditors;  and  in  case  of  the  death  of 
the  wife  before  the  decease  of  the  husband,  the  amount  of 
tlie  insurance"  may  be  made  payable,  after  death,  to  her 
children  for  their  use,  and  to  their  guardian  if  under  age. 

Sec.  S4.  Mlsrcprcscufntion  in  Ajiplicaiidu.  AVhenever  the 
a];ilication  for  a  policy  of  life  insurance  contains  a  clause 
of  warianty  of  the  truth  of  the  answers  therein  contained, 
no  niisreitresentati(m  or  untrue  statement  in  sucli  appli- 
cation, made  in  good  faith  by  the  applicant,  shall  effect  a 
forfeiture  or  be  a  ground  of  defense  in  any  suit  brought 


119 


upon  any  policy  of  iusiirance  issued  upon  tlie  faitli  of  such 
api)lication,  unless  such  misrepresentation  or  untrue  state- 
ment relates  to  some  matter  material  to  the  risk. 

Sec.  85.  Misstatement  of  Age  In  Application.  Wlien- 
cA'er  it  shall  be  made  to  appear  that  a  wrong  age  has  been 
aiven  in  good  faith  in  any  application  for  a  policy  of  life 
insurance,  the  company  shall  not  be  required  to  pay  the' 
face  value  of  tlie  policy,  but  such  sum  as  the  premium  paid 
would  liave  purchased  at  the  applicant's  real  age  at  the 
time  of  elfecting  the  insurance. 

Sec.  80.  /^ostpoiiciitciit  of  Diridcnds  on  Policies.  iS'o  life 
insurance  compvmy  authorized  to  tran.sact  business  in  this 
State  shall  hereafter  issue  to  or  upon  the  life  of  any  resi- 
dent of  this  State  any  policy  participating  in  the  profits  or 
sur])lus,  under  which  the  accounting,  apportionment  and 
dis.tributiori  of  surplus  to  the  policyholders  shall  be  de- 
layed for  a  longer  period  than  five  years  from  the  date  at 
wliich  the  insurance  first  went  into  effect,  or  from  any  pre- 
ceeding  accounting,  apportionment  or  distribution  of  sur- 
plus. 

No  such  company  shall  be  permitted  to  enter  into  any 
agreement  with  any  policyholder  or  applicant  for  insur- 
ance, intended  as  a  waiver  of  any  of  the  provisions  of  this 
section,  and  it  shall  be  the  duty  of  the  commissioner  to  re- 
voke the  authority  of  any  such  company  to  transact  busi- 
ness in  this  State,  for  failure  to  comply  with  any  of  the  re- 
quirements of  this  section. 

Sec.  87.  Underaverage  Risks.  Nothing  in  the  foregoing 
section  shall  apply  to  policies  written  on  underaverage 
risks,  but  such  underaverage  insurance  may  be  written 
upon  such  terms  as  the  parties  may  agree  upon,  and  the 
surplus  may  be  apportioned  and  dividends  declared  and 
paid  annually,  or  at  longer  intervals  in  the  manner  and 
proportions,  and  among  the  parties  entitled  thereto  under 
the  terms  of  their  renewal  contracts  with  the  corporation. 


7.20 

Sec.  88.  Insurance  or  Reinstatement  of  Unsound  Per- 
son. Any  agent,  physician  or  other  person  who  shall  in- 
sure, or  knowingly  cause  to  be  insured  or  reinstated  in 
membership,  any  infirm  or  unhealth}^  person  not  at  the 
tin;e  in  an  insurable  condition,  shall  be  deemed  guilty  of  a 
misdemeanor. 

Sec.  89.  Inadequate  Rates.  Whenever  the  actuary  for 
the  department  shall  ascertain  that  any  insurance  com- 
pany doing  business  in  this  State  is  writing  and  issuing 
policies  upon  an  insufficient,  insecure  or  impracticable 
table  of  rates,  then  he  shall  report  the  same  to  the  com- 
missioner, who,  upon  such  report,  shall  notify  such  com- 
]>any  so  Avriting  or  issuing  policies  at  rates  less  than  are 
deemed  in  the  opinion  of  said  actuary  adequate  for  the 
protecton  of  its  contracts  made  with  its  policyliolders,  of 
the  fact  of  such  report  and  advice;  and  shall  thereupon, 
if  sucli  company  shall  refuse  or  neglect  to  adjust  its  rates 
in  accordance  with  the  advice  of  said  actuary,  cause  an 
exannnation  to  be  made  into  the  affairs  of  said  company, 
and  if  the  opinion  of  said  actuary  be  sustained  by  the  re- 
sult of  such  examination,  it  shall  be  the  duty  of  the  com- 
missioner to  require  said  company  to  cease  writing  and 
issuing  policies  at  rates  so  found  to  be  insufficient.  If  said 
company  continues  the  writing  and  issuing  of  such  policies 
after  notice  from  tlie  commissioner,  then  it  shall  be  the 
duty  of  the  commissioner  to  institute  proceedings  against 
said  company  as  provided  in  section  51  of  this  Article. 

Sec.  90.  Misrepresentation  of  Policy.  No  life,  health  or 
accident  insurance  company,  or  officer,  director,  agent, 
solicitor  or  broker,  or  any  person  shall  make  any  misrep- 
resentation, oral,  written  or  otherwise,  to  any  person  for 
the  purpose  of  inducing  or  tending  to  induce  such  person 
to  take  out  a  policy  of  life,  healtli  or  accident  insurance,  or 
for  tlie  purpose  of  inducing  or  tending  to  induce  a  policy- 
liohler  in  any  company  to  lapse,  forfeit  or  surrender  his 
insurance  therein,  or  to  refuse  to  accept  a  policy  issued 
upon  an  application  thereof  and  to  take  out  a  policy  of  in- 
surance in  any  other  company. 


121 

Sec.  91.  Fraud  Practiced  Against  Company.  Any  agent, 
collector,  physician,  assured  or  other  person  who  shall 
make,  present  or  cause  to  be  presented  to  any  company, 
including  fraternal  beneficiary  companies  or  associations 
any  false,  dishonest  or  fraudulent  certificate  or  report  of 
death,  sickness  or  disability  of  any  kind  or  nature,  or  any 
false,  dishonest  or  fraudulent  claim  for  any  death,  sick- 
ness or  disabilit}^  benefit,  or  claim  for  payment  to  or 
against  any  such  company;  or  any  agent  or  collector  who 
shall  falsely  represent  or  pretend  to  represent  any  such 
company,  or  Avho  shall  collect  or  attempt  to  collect  any 
premiums  or  money's  or  do  any  business  of  insurance  with- 
out authority  of  the  company  for  which  he  pretends  or 
claims  to  act,  or  who  shall  secure  or  obtain  any  cash  or 
I)ecuniary  advantage  from  any  such  company  by  any  false 
statement,  or  who  shall  fail  to  turn  over  when  required  to 
do  so,  or  satisfactorily  account  for  all  collections  for  or  on 
account  of  or  property  of  any  such  company,  shall  be 
deemed  guilty  of  a  misdemeanor. 

Sec.  92.  Siritc/iinf/  Policies.  No  agent,  collector,  solici- 
tor or  other  empk)yee  or  representative  of  any  company  is- 
siiing  contracts  providing  for  sick,  accident  or  death  bene- 
fits and  operating  on  the  weekly  or  monthl^^  industrial 
plan,  shall  be  deemed  the  owner  of  any  part  of  the  weekly 
or  monthly  debit  collected  by  him  or  that  may  be  under 
his  cliarge,  care,  control  or  supervision,  but  each  and  every 
such  debit  shall  be  deemed  wholly  the  property  of  the  com- 
pany in  whose  name  such  policies,  contracts  or  obligations 
were  written  or  assumed.  No  agent,  collector,  solicitor, 
superintendent  or  other  employee  or  representative  of  any 
such  company  shall  barter,  sell,  give,  transfer  or  in  any 
manner  switch,  or  offer  or  attemi^t  to  barter,  sell,  give, 
transfer  or  in  any  manner  switch  to  any  person  or  com- 
pany any  part  of  any  debt  of  such  company,  or  any  poli- 
cies or  contracts  of  such  company,  without  the  consent  of 
said  company  first  had  in  writing. 


122 

Sec.  93.  Penalty  for  Violation  of  Sections  90,  91  and  92. 
Any  insurance  company,  agent,  solicitor  or  broker,  or  any 
person  Avliatsoever  violating  any  provision  of  Sections  90^.. 
91  and  92  shall,  upon  conviction,  be  sentenced  to  pay  a 
fine  of  not  less  than  one  hundred  dollars  or  more  than  flvo 
hundred  dollars  for  each  and  every  violation,  or  in  the  dis^ 
cretion  of  the  court,  to  an  imprisonment  for  a  period  of 
not  more  than  six  months. 

Sec.  94.  Impairment  of  Capital.  In  case  it  is  found  that 
any  life  insurance  company  doing  business  in  this  State 
has  not  on  hand,  after  deducting  all  debts  and  claims 
against  it,  exclusive  of  capital  stock,  an  amount  of  assets 
of  the  character  authorized  by  this  Article  equal  in  value 
to  the  net  present  value  of  its  policies  in  force,  it  shall  be 
the  duty  of  the  commissioner  to  publish  the  fact  that  the 
existing  condition  of  the  affairs  of  such  company  is  below 
the  legal  standard  of  solvency  established  by  this  State, 
and  he  shall  require  the  compan^^  at  once  to  cease  doing 
new  business  and  cause  a  rigid  examination  in  regard  to 
all  of  the  affairs  of  such  company.  If  it  shall  thereupon 
appear  that  said  company  is  in  such  condition  as  to  fall 
below  the  legal  standard  of  solvency  established  by  this 
Article,  the  commissioner  shall  not  permit  said  company 
to  continue  in  control  of  its  business,  and  it  shall  be  his 
duty  to  at  once  institute  the  necessary  proceedings  in  ac- 
cordance with  the  provisions  of  this  Article  for  the  pro- 
tection of  its  policyholders,  and  to  publish  the  results  of 
the  examination  of  such  company  whenever  he  may  deem 
it  for  the  interest  of  the  public  to  do  so;  provided,  how- 
ever, that  in  case  it  shall  appear  that  there  is  no  fraud, 
gross  incompetency  or  recklessness  in  the  management  of 
said  compan^^,  he  may  allow  said  company  ninety  days 
from  the  time  of  the  completion  of  said  examination  with- 
in whicli  to  reestablish  its  solvency,  before  instituting  pro- 
ceedings as  herein  provided. 

Sec.  95.  2Iutual  Industrial  Life  Insurance  Companies. 
Companies  issuing  certificates  for  the  payment  of  money 
or  other  benefits  in  the  event  of  sickness,  accident  or  death, 


123 

or  other  coutiugency,  either  to  the  members,  policy'  or 
certificate  holders,  or  to  their  families  or  representatives, 
but  issuing  no  certificate  or  other  form  of  contract  of  pay- 
ment in  the  aggregate  of  a  greater  sum  than  one  thousand 
dollars  upon  the  termination  of  any  one  life  or  combina- 
tion of  lives,  or  a  sum  greater  than  seventy-five  dollars  an- 
nually, or  the  equivalent  thereof,  whether  the  payments 
be  stipulated  to  be  made  annually,  or  at  shorter  or  longer 
intervals,  upon  any  contract  of  annuity  in  which  the  con- 
tinuance of  any  one  life,  whether  singly  or  in  connection 
with  other  lives  jointly  or  in  succession,  or  combined  in 
any  way  whatsoever,  or  during  sickness  or  disability,  is 
involved  as  an  element  of  the  contract,  may  be  formed 
subject  to  the  provisions  of  this  Article  applicable  to  life 
insurance  companies  and  not  inconsistent  herewith,  on  the 
mutual,  co-operative,  assessment  or  stock  plan.  Any  such 
company  formed  on  tlie  mutual,  co-operative  or  assess- 
U'ent  plan,  shall  not  be  entitled  to  receive  a  certificate  of 
authority  to  transact  such  business,  or  issue  any  benefit 
certificate,  or  pay  or  allow,  or  otfer  or  promise  to  pay  or 
allow  to  any  person  any  deatli,  endowment  or  disability 
benefit  until  actual  bona  fide  applications  for  death  benefit 
certificates  shall  have  been  secured  upon  at  least  five  hun- 
dred lives  for  the  aggregate  amount  of  at  least  twenty 
thousand  dollars.  All  such  companies  formed  on  the  capi- 
tal stock  plan,  except  those  authorized  and  referred  to  in 
Section  97,  shall,  before  being  entitled  to  receive  a  certifi- 
cate of  authority  to  transact  such  business,  have  a  paid-up 
capital  of  at  least  fifty  thousand  dollars,  and  all  such  com- 
panies, except  those  authorized  and  referred  to  in  said 
Section  97,  whether  formed  on  the  mutual,  co-operative, 
assessment  or  capital  stock  plan,  shall  be  possessed  of  and 
constantly  maintain  a  sum  of  money  not  less  in  amount 
than  fifty  thousand  dollars,  or  interest  or  dividend-paying 
securities  of  equal  market  value,  not  in  default,  which 
shall  be  deposited  with  the  commissioner  as  provided  by 
Section  21. 


124 

Sec.  96.  Conversion  of  Mutual  Life  to  Stock  Company. 
Any  life,  accident  or  health  insurance  company  heretofore 
incorporated  nnder  the  laws  of  this  State  without  capital 
stock,  and  whether  conducted  uj)on  the  mutual,  legal  re- 
serve, co-operative  or  assessment  plan,  may,  with  the  con- 
sent of  at  least  three-fourths  of  its  directors,  become  a 
stock  corporation,  subject  to  the  laws  of  this  State  appli- 
cable to  such  corporations,  and  those  prescribing  the  form 
and  manner  of  making  amendments  to  articles  of  incor- 
poration, upon  complying  with  the  following  conditions 
and  regulations :  Notice  of  the  proposal  so  to  change  the 
form  of  the  corporate  organization  and  of  the  meeting  of 
the  members  of  the  corporation,  its  policyholders  or  certifi- 
cate holders,  or  by  whatever  name  its  members  are  known, 
to  be  held  for  the  purpose  of  taking  action  thereon,  shall 
be  given  by  publication  stating  the  time,  place  and  object 
of  said  meeting,  once  a  week  for  six  consecutive  weeks  in 
at  least  one  newspaper  of  general  circulation  published  in 
the  city  or  county  in  which  said  corporation  has  its  prin- 
cipal i)lace  of  business,  and  in  at  least  two  such  news- 
papers ,  if  so  many  are  published  in  said  city  or  county. 

At  sucli  meeting  there  shall  be  required,  in  order  to  effect 
the  change  proposed,  the  affirmative  vote  in  person,  or  the 
consent  in  writing,  of  at  least  two-thirds  of  all  the  mem- 
bers of  the  corporation  and  the  concurrence  of  at  least 
three-fourths  of  the  directors.  At  such  meeting,  if  the  pro- 
posed change  be  approved,  the  amount  of  the  capital  stock 
of  the  corporation  shall  be  fixed,  within  the  limits  pre- 
scribed by  law  for  such  corporations,  and  the  par  value  of 
the  shares  and  number  of  shares  into  which  the  capital 
stock  is  to  be  divided  shall  also  be  determined.  The  mem- 
bers, policyliolders  or  certificate  holders  of  such  corpora- 
tion sliall  luive  the  first  right  to  subscribe  to  said  stock, 
subject  to  such  equitable  regulations  as  the  directors  may 
prescribe,  but  all  subscriptions  for  shares  of  stock  must  be 
made  and  paid  for  in  cash  and  at  a  price  not  less  than  par. 
Stock  must  be  paid  for  in  cash  not  less  than  par.  Upon 
the  completion  of  its  reorganization  as  a  stock  company 


125 

(lie  assets,  if  any,  of  siuh  corporation  and  its  liabilities 
sluill  be  and  become  the  assets  and  liabilities  of  the  stock 
coiiipariv,  except  so  far  as  herein  otherwise  provided. 
8aid  conii>an3',  however,  shall  not  be  entitled  to  do  any 
business  as  a  stock  corporation,  until  the  amount  of  capi- 
tal stock,  determined  as  herein  provided  and  as  authorized 
by  law,  shall  have  been  subscribed  and  paid  for  at  not  less 
than  par  and  in  accordance  with  the  laws  governing  the 
formation  of  corporations,  and  shall  have  been  invested  in 
an  amount  equal  to  the  par  A-alue  of  such  stock  in  securi- 
ties mentioned  and  authorized  by  Section  21,  and  deposit- 
ed with  the  Insurance  Commissioner  to  guarantee  the  pay- 
ment of  policies  issued  by  said  company,  and  until  the  com- 
missioner shall,  upon  request,  value  the  assets  of  the  said 
company,  and  its  outstanding  policies,  and  shall  give  his 
certificate  tliat  the  admitted  assets  of  said  company  are 
sutiflcient  to  provide  reserve  upon  all  outstanding  policies 
as  required  by  the  laws  of  this  State  in  relation  to  insur- 
ance companies,  over  and  above  all  bona  fide  debts  and 
claims  against  it,  exclusive  of  its  capital  stock  liability. 
Upon  th(?  receipt  of  such  certificate  from  tlie  Insurance 
Commissioner,  the  stockholders  may  elect  from  among 
themselves  not  less  than  five  or  more  than  twenty-five  di- 
rectors to  hold  office  until  the  ensuing  annual  meeting  or 
until  their  successeors  shall  have  been  duly  elected  and 
shall  qualify,  and  the  directors  so  elected  shall  have,  and 
they  are  hereby  authorized,  to  exercise  all  the  rights  and 
powers  proper  to  be  exercised  by  the  directors  of  such 
stock  company  under  the  laws  of  this  State. 

The  Insurance  Commissioner  upon  request,  and  upon 
payment  to  him  at  the  usual  rates  of  the  cost  of  such  work, 
shall  ascertain  and  certify  the  proportionate  interest  in 
the  assets  of  the  mutual  corporation  before  its  reorganiza- 
tion as  a  stock  company,  of  each  of  the  members  of  the 
mutual  company  who  may  refuse  to  assent  to  the  change  of 
said  company  into  a  stock  company;  but  the  interest  of  no 
member  so  dissenting  shall  be  valued  at  more  than  the  full 
legal  reserve  upon  his  policy  as  prescribed  by  law,  at  the 


126 

time  of  the  reorganization  of  the  corporation  as  a  stock 
company,  and  the  amount  of  the  interest  of  each  such  dis- 
senting member  or  policyhohier  shall  be  paid  over  to  him, 
and  upon  the  payment  or  tender  to  him  of  the  amount  of 
interest  so  ascertained  and  certified,  the  membership  of 
each  such  dissenting  member  or  policyholder  shall  cease 
and  determine;  and  the  remainder  of  the  assets  in  excess  of 
the  sum  required  for  the  compensation  of  dissenting  mem- 
bers or  policyholders  as  aforesaid,  may  be  deposited  with 
the  Treasurer  of  Maryland  or  the  Insurance  Commis- 
sioner under  the  provisions  of  Sections  20  and  21  of  this 
Article,  as  a  guarantee  for  the  payment  of  the  policies 
issued  by  said  company'.  Any  surplus  tliat  may  be  found 
to  exist  in  the  assets  of  such  corporation  over  and  above 
all  its  liabilities,  including  the  legal  reserve  for  all  out- 
standing policies  in  force,  as  ascertained  and  certified  by 
the  Insurance  Commissioner  as  hereinabove  provided  at 
the  date  of  its  reorganization  as  a  stock  company,  shall  be 
held  as  a  fund  for  the  security  of  the  creditors  of  the  com- 
pany, and  sliall  under  no  circumstances  pass  to  the  owner- 
sliip  of  the  stockholders,  be  distributed  among  them  or  be 
used  or  encroached  upon  for  the  payment  of  oividends 
upon  the  capital  stock. 

The  mutual  policies  and  all  rights  and  liabilities  attach- 
ing thereto,  and  all  the  powers  and  obligations  of  the  com- 
pany with  reference  to  the  same,  shall  survive  so  long  as 
said  policies  shall  remain  in  force,  except  that  such  policies 
shall  thereafter  be  considered  as  policies  for  the  lurcr^st 
amount  which,  according  to  their  terms,  might  be  payable 
nierounder  in  case  the  assessments  provided  for  should 
yield  a  sufficient  amount  to  pay  the  same,  and  if  any  cer- 
tain number  of  assessments  be  specified  upon  said  policies 
as  payable  by  the  holders  thereof,  tlie  company  shall  not 
be  entitled  to  levy  any  further  assessments,  even  though 
such  rights  may  have  been  previously  reserved  in  the 
policy. 


127 

Sec.  97.  Companies  Converted  Prior  to  July  1,  lOK). 
Sufli  mutual,  cooperative  or  assessment  industrial  iiisiir- 
aiice  companies,  organized  and  doing  business  in  this  State 
prior  to, January  1,  1914,  as  actually  converted,  prior  to 
July  1,  191  (),  in  conformity  with  the  law  providing  for  the 
conversion  of  such  companies,  may  have  a  paid-up  capital 
less  than  fifty  thousand  dollars,  but  not  less  than  ten  thou- 
sand dollars;  provided, , that  in  no  case  shall  the  assets  of 
any  such  company  at  any  time  be  insufficient  to  provide 
full  legal  reserve  upon  all  outstanding  x)olicies  as  required 
by  law,  over  and  above  all  bona  fide  debts  and  claims 
against  it,  exclusive  of  capital  stock;  and  provided  further, 
that  no  such  company  having  a  paid-up  capital  stock  less 
than  fifty  thousand  dollars  shall  issue  any  certificate  or 
other  form  of  contract  for  the  payment  of  a  greater  sum  of 
money  in  the  aggregate  than  five  hundred  dollars  upon  the 
termination  of  any  one  life  or  combination  of  lives,  or  a 
sum  greater  than  seventy-five  dollars  annually,  or  equiva- 
lent thereof,  upon  any  contract  of  annuity,  or  during  sick- 
ness or  disability. 

Sec.  98.  Insurance  of  Infants.  Companies  as  mentioned 
in  Sections  95,  96  and  97,  upon  complying  with  the  require- 
ments of  this  Article  with  reference  to  such  companies, 
may  make  such  contracts  of  insurance  as  are  allowed  by 
said  sections,  both  of  adults  and  infants,  provided,  how- 
ever, that  in  all  cases  of  the  insurance  of  infants,  some 
adult  shall  become  responsible  for  all  obligations  of  any 
such  infant  to  the  company  writing  said  insurance. 

Sec.  99.  Reserves  for  Industrial  Accident  and  Health  In- 
surance. All  companies  of  the  classes  referred  to  in  Sec- 
tions 95,  96  and  97,  conducting  the  business  of  health  in- 
surance, or  assuming  the  payment  of  money  or  providing 
other  benefits  on  account  of  and  during  disability  from 
sickness  or  accident  in  this  State,  shall  have  and  constant- 
ly maintain,  over  and  above  its  capital  stock  and  other 
liabilities  and  reserves  required,  and  as  a  special  security 
for  the  payment  of  such  benefits,  cash  or  investments  such 


128 

as  are  prescribed  for  the  reserve  fund  of  life  insurance 
companies,  equal  in  amount,  if  the  premiums  for  such 
benefits  are  payable  monthly  or  at  shorter  intervals,  to  at 
least  one  twelfth  part  of  the  total  premiums  or  contribu- 
tions payable  during  the  year  for  and  on  account  of  such 
disability  insurance  or  sick  or  accident  benefits;  and  if  the 
f>remiums  for  such  insurance  are  payable  annually  or  at 
intervals  longer  than  one  month,  then  the  sum  to  be  main- 
tained shall  be  the  amount  of  the  unearned  premium  calcu- 
lated proportionately  for  the  unexpired  term  of  the  in- 
surance in  the  manner  provided  in  this  Article  for  calcu- 
lating the  reinsurance  reserve  of  fire  insurance  comj)anies. 

Sec  100.  Bonds  Required  of  Industrial  Acfeiits.  Every 
industrial  life,  accident  or  health  insurance  company  doing 
business  in  this  State,  shall  require  from  each  of  its  agenta 
or  collectors  in  this  State  a  good  and  sufficient  bond  for  not 
less  than  fifty  dollars.  Failure  to  require  such  bond  shall, 
in  each  and  every  case,  be  deemed  to  be  a  misdemeanor, 
and  upon  conviction,  the  company  so  adjudged  to  be  guilty 
shall,  for  each  such  offense,  be  subject  to  the  penalties 
specified  in  Section  53,  and  in  addition  thereto,  be  liable 
for  any  damage  the  public  may  have  sustained  by  reason  of 
such  failure.  The  informant  shall  receive  one-half  of  any 
fines  imposed  under  this  section. 

Siireti/,  (^(iximJti/,  Lidhiliiij  and  Couipen- 
satioii   Iiiyui'ducr. 

Sec.  101.  Corporate  f>uretij  Bonds  AutJiorizcd.  When- 
ever any  bond,  undertaking,  recognizance  or  other  obliga- 
tion is  by  law,  or  the  charter,  ordinances,  rules  or  regula- 
tions of  any  municipality,  board,  body,  organization,  court, 
judge  or  public  officer,  required  or  permitted  to  be  niade, 
given,  tendered  or  filed  with  surety  or  sureties,  and  when- 
ever tlie  performance  of  any  act,  duty  or  obligation,  or  the 
refraining,  from  any  act,  is  required  or  permitted  to  be 
guaranteed,  such  bond,  undertaking,  obligation,  recogniz- 
ance or  guaranty  may  be  executed  by  a  surety  company 
(lualifiod  as  hereinafter  provided;  and  such  execution  by 


' 


129 

such  company  of  such  bond,  undertakiug,  obligatiou,  recog- 
nizance 01*  guaranty-  shall  be  in  all  respects  a  full  and  com- 
plete compliance  with  every  requirement  of  every  law, 
charter,  ordinance,  rule  or  regulation  that  such  bond, 
undertaking,  obligation,  recognizance  or  guaranty  shall  be 
executed  by  one  surety  or  by  one  or  more  sureties,  or  that 
such  sureties  shall  be  residents  or  householders  or  free- 
holders, or  either  or  both,  or  possess  any  other  qualifica- 
tion ;  and  all  courts,  judges,  heads  of  departments,  boards, 
bodies,  municipalities  and  public  officers  of  every  charac- 
ter, shall  accept  and  treat  such  bond,  undertaking,  obliga- 
tion, recognizance  or  guaranty  when  so  executed  by  such 
company  as  conforming  to  and  fully  and  c(nn])letely  com- 
plying with  every  such  requirement  of  every  such  law, 
charter,  ordinance,  rule  or  regulation. 

Sec.  102.  QuaUpcatiuiis  ami  ^Surplus.  Any  (•(U)i])any  to 
be  qualified  to  act  as  surety  or  guarantor  in  this  State,  or 
to  transact  any  of  the  classes  of  business  known  as.  casual- 
ty, liability  or  workmen's  compensation  insurance,  must 
comply  with  all  the  requirements  of  this  Article  applicable 
to  insurance  companies,  except  such  requirements  as  may 
be  inconsistent  with  those  embraced  within  the  sections 
under  this  sub-title,  must  be  authorized  under  the  laws  of 
the  State  where  incorporated  and  under  its  charter  to  do 
the  classes  of  business  for  which  a  license  is  sought  under 
the  laws  of  this  State,  and  every  such  company  authorized 
to  write  fidelity  or  surety  bonds,  or  liability  or  workmen's 
compensation  insurance,  must  have  good,  available  assets 
of  at  least  one  hundred  and  twenty-five  thousand  dollars 
in  excess  of  its  capital  stock,  reserves  and  all  other  liabili- 
ties. 

Sec.  103.  Certificate  of  AutJioritfj.  The  commissioner 
shall  issue  to  any  company  having  complied  with  all  the 
requirements  of  this  Article  applicable  thereto  and  apply- 
ing therefor  a  license  or  certificate  setting  forth  that  said 
company  has  qualified  and  is  authorized  for  the  ensuing 
vear  to  do  the  classes  of  business  in  this  State  set  forth  in 


(5) 


130 

said  certificate,  which  said  certificate  shall  be  evideuce  of 
such  qualification  of  such  company  to  do  the  classes  of 
business  authorized  by  said  certificate,  and  if  so  autlior- 
ized  therein  of  its  authorization  to  become  and  be  accepted 
as  sole  surety  on  all  bonds,  undertakings,  recognizances 
and  obligations  required  or  permitted  by  law,  or  in  the 
charter,  ordinances,  rules  or  regulations  of  any  municipal- 
it3',  board,  body,  organization  or  public  officer,  and  of  the 
solvency  and  credit  of  such  company  for  all  purposes,  and 
of  its  sufficiency  as  such  surety. 

i^EC.  1(U.  Corporate  Fiduciurji  >^haU  Not  Act  As  ^^l(retl/. 
No  corporation,  which,  under  the  laws  of  this  State,  shall 
act  as  trustee,  executor,  administrator,  guardian,  commit- 
tee or  receiver,  or  in  any  one  or  more  of  those  capacities^ 
without  bond  or  security  other  tlian  its  own  obligation,  in 
any  case  in  which  bond  would  be  required  from  a  natural 
person  in  the  like  or  similar  capacity,  shall  incur  the  lia- 
bility of  a  surety  upon  any  bond  of  any  sort  or  description. 

Sec.  105.  J^rcniiinu  Rrscrvr.  Every  company  doing  any 
of  the  classes  of  business  mentioned  and  embraced  in  the 
preceding  section,  shall  be  charged  with  and  maintain  as 
any  other  liability  an  unearned  or  reinsurance  reserve  for 
all  unexpired  policies  or  risks  in  force,  equal  to  the  un- 
earned portions  of  the  gross  premiums  charged  for  cover- 
ing said  policies  or  risks,  computed  on  each  respective 
policy  or  risk  from  the  date  of  the  issuance-  of  the  policy, 
bond  or  other  contract  of  insurance;  or,  in  the  discretion 
of  the  commissioner,  at  the  rate  of  fifty  per  centum  of  the 
current  annual  premiums  on  each  outstanding  bond, 
l)olicy  or  contract  in  force  and  written  for  one  year  or  less, 
and  on  policies  and  bonds  in  force  and  written  for  more 
than  one  year  at  the  rate  of  fifty  per  centum  of  the  current 
year's  premiums,  plus  the  whole  of  the  premiums  for  sub- 
sequent years. 

Se(\  KfG.  (Id i III  I*cs-crrcs.  All  conspanies  authorized  to 
do  any  of  the  above  classes  of  business  in  this  State,  shall, 
in  addition  to  the  unearred  premium  or  reinsurance  re- 


1 


131 

serve  required  by  Section  105,  also  at  all  times  keep  and 
maintain  adequate  reserve  sufficient  to  pay  the  claims 
which  may  have  been  filed  against  such  companies,  com- 
puted as  hereinafter  provided. 

Sec.  107.  LuihUitji  and  Com pciisatioii  (laiui  /'cscrrc.s. 
Tlie  reserve  for  outstanding  losses  under  insurance  against 
loss  or  damage  resulting  from  accident  to  or  injuries  suf- 
fered by  an  emplo^'ee  or  other  person  and  for  wliich  the 
insured  is  liable,  and  under  insurance  against  loss  from 
liability  on  account  of  the  death  of  or  injury  to  an  em- 
ployee not  caused  by  the  negligence  of  the  employer,  shall 
be  determined  as  follows: 

(1)  For  all  liability  suits  being  defended  under  policies 
written  more  than  (a)  Ten  Years  prior  to  the  date  as  of 
which  the  statement  is  made,  one  thousand  five  hundred 
dollars  for  each  suit,  (b)  Five  and  less  than  Ten  Years 
prior  to  the  date  as  of  which  the  statement  is  made,  one 
thousand  dollars  for  each  suit,  (c)  Three  and  less  than 
Five  Years  prior  to  the  date  as  of  which  the  statement  is 
made,  eight  hundred  and  fifty  dollars  for  each  suit;  (2) 
For  all  liability  policies  written  during  the  three  years  im- 
mediately preceding  the  date  as  of  which  the  statement  is 
made,  such  reserve  shall  be  sixty  per  centum  of  the  earned 
liability  premiums  of  each  of  such  three  years,  less  all  loss 
and  loss  expense  payments  made  under  liability  policies 
written  in  the  corresponding  years;  but  in  any  event,  such 
reserve  shall,  for  the  first  of  such  three  years,  be  not  less 
than  seven  hundred  and  fifty  dollars  for  each  outstanding 
liability  suit  on  said  year's  policies;  (3)  For  all  compen- 
sation claims  under  policies  written  more  than  three  years 
prior  to  the  date  as  of  which  the  statement  is  made,  the 
present  values  at  four  per  centum  interest  of  the  deter- 
mined and  estimated  future  payments;  (4)  For  all  compen- 
sation claims  under  policies  written  in  the  three  years  im- 
mediately preceding  the  date  as  of  which  the  statement  is 
made,  such  reserve  shall  be  sixty-five  per  centum  of  the 
earned  compensation  premiums  of  each  of  such  three  years, 
less  all  loss  and  loss  expense  payments  made  in  connection 


132 

with  such  claims  under  policies  written  in  the  correspond- 
ing years;  but  in  any  event,  in  the  case  of  the  first  year  of 
any  such  three-year  period  such  reserve  shall  not  be  less 
than  the  present  value  at  four  per  centum  interest  of  the 
determined  and  the  estimated  unpaid  compensation  claims 
under  policies  written  during  such  year.  The  term  ''earn- 
ed  premiums"  as  used  herein  shall  include  gross  premiums 
charged  on  all  policies  written,  including  all  determined 
excess  and  additional  premiums,  less  return  premiums 
other  than  premiums  returned  to  policyholders  as  divi- 
dends, and  less  reinsurance  premiums  and  premiums  on 
policies  cancelled,  and  less  unearned  premiums  on  policies 
in  force.  But  any  participating  company  which  has 
charged  in  its  premiums  a  loading  solely  for  dividends 
shall  not  be  required  to  include  such  loading  in  its  earned 
premiums,  provided  a  statement  of  the  amount  of  such 
loading  had  been  filed  with  and  approved  by  the  Insurance 
Commissioner. 

The  term  "compensation''  as  used  in  this  Act  'shall  re- 
late to  all  insurance  effected  by  virtue  of  statutes  provid- 
ing compensation  to  employees  for  personal  injuries  irre- 
spective of  fault  of  the  employer.  The  term  "liability" 
shall  relate  to  all  insurance,  except  compensation  insur- 
ance, against  loss  or  damage  from  accident  to  or  injuries 
suffered  by  an  employee  or  other  person  and  for  which  the 
insured  is  liable. 

The  term  "loss  payments"  and  "loss  expense  payments" 
as  used  herein  shall  include  all  payments  to  claimants,  in- 
cluding payments  for  medical  and  surgical  attendance, 
legal  expenses,  salaries  and  expenses  of  investigators,  ad- 
justers and  field  men,  rents,  stationery,  telegraph  and  tele- 
phone charges,  postage,  salaries  and  expenses  of  office  em- 
ployees, home  office  expenses,  and  all  othQr  payments  made 
on  account  of  claims  whether  sucli  payments  shall  be  al- 
located to  specific  claims  or  unallocated. 

All  unallocated  liability  loss  expense  payments  made  in 
a  given  calendar  year  subsequent  to  the  first  four  years  in 
whicli  an  insurer  has  been  issuing  liability  policies  shall 


133 

be  distributed  as  follows :  Thirty-five  per  centum  sball  be 
charged  to  the  policies  written  in  that  year,  forty  per 
centum  to  the  policies  written  in  the  preceding  year,  ten 
per  centum  to  the  policies  written  in  the  second  year  pre- 
ceding, ten  per  centum  to  the  policies  written  in  the  third 
year  preceding  and  five  per  centum  to  the  policies  written 
in  the  fourth  year  preceding.  Such  payments  made  in 
each  of  the  first  four  calendar  years  in  which  an  insurer 
issued  liability  policies  shall  be  distributed  as  follows :  In 
the  first  calendar  year  one  hundred  per  centum  shall  be 
charged  to  the  policies  written  in  that  year ;  in  the  second 
calendar  year  fifty  per  centum  shall  be  charged  to  the 
policies  written  in  that  year  and  fifty  per  centum  to  the 
policies  written  in  the  preceding  year;  in  the  third  calen- 
dar year  forty  per  centum  shall  be  cliarged  to  the  policies 
written  in  that  year,  forty  per  centum  to  the  policies  writ- 
ten in  the  preceding  year,  and  twenty  per  centum  to  tlie 
policies  written  in  the  second  year  preceding;  and  in  the 
fourth  calendar  year  thirty-five  per  centum  shall  be 
charged  to  the  policies  written  in  that  year,  forty  per 
centum  to  the  policies  written  in  the  second  year  preced- 
ing, and  ten  per  centum  to  the  policies  written  in  the  third 
year  preceding,  and  a  schedule  showing  such  distribution 
shall  be  included  in  the  annual  statement. 

All  unallocated  compensation  loss  expense  payments 
made  in  a  given  calendar  year  subsequent  to  the  first  three 
years  in  which  an  insurer  has  been  issuing  compensation 
policies  shall  be  distributed  as  follows :  Forty  per  centtim 
shall  be  charged  to  the  policies  written  in  that  year,  forty- 
five  per  centum  to  the  policies  written  in  the  preceding 
,  year,  ten  per  centum  to  the  policies  written  in  the  second 
year  preceding  and  five  per  centum  to  the  policies  written 
in  the  third  year  preceding.  Such  payments  made  in  each 
of  the  first  three  calendar  years  in  which  an  insurer  issues 
compensation  policies  shall  be  distributed  as  follows:  In 
the  first  calendar  year  one  hundred  per  centum  shall  be 
charged  to  the  policies  written  in  that  year ;  in  the  second 
calendar  year  fifty  per  centum  shall  be  charged  to   the 


134 

policies  written  in  that  year  and  fifty  per  centum  to  the 
policies  WTitten  in  the  preceding  year;  in  the  third  calen- 
dar year  fortj-five  per  centum  shall  be  charged  to  the 
policies  written  in  that  year,  forty-five  per  centum  to  the 
policies  written  in  the  preceding  3^ear  and* ten  per  centum 
to  the  policies  written  in  the  second  year  preceding,  and  a 
schedule  shoAving  such  distribution  shall  be  included  in  the 
annual  statement. 

Whenever,  in  the  judgment  of  the  Insurance  Commis- 
sioner, the  liability  or  compensation  loss  reserves  of  any 
insurer  under  his  supervision,  calculated  in  accordance 
with  the  foregoing  provisions,  are  inadequate,  he  may,  in 
his  discretion,  require  such  insurer  to  maintain  additional 
reserves  based  upon  estimated  individual  claims,  or  other- 
wise. 

Each  insurer  that  writes  liability  or  compensation 
policies  shall  include  in  the  annual  statement  required  by 
law  a  schedule  of  its  experience  thereunder  in  such  form 
as  the  Insurance  Commissioner  may  prescribe. 

Sec.  108.  FideJify,  Surety  and  Casualty  Claim  Reserves. 
The  reserve  for  all  other  outstanding  losses  under  any  and 
all  other  classes  of  casualty  insurance  policies  and  under 
every  character  of  bond  and  writing  obligatory,  executed 
by  casualty  or  bonding  insurance  company,  shall  be  de- 
termined by  a  consideration  of  facts  and  circumstances 
of  each  particular  claim,  the  amount  so  set  aside  as  a  re- 
serve to  be  reasonably  sufficient  to  cover  the  probable  ex- 
pense and  payments  in  each  case.  The  reserves  for  claims 
of  the  classes  mentioned  in  this  section  shall  be  first  esti- 
mated and  set  aside  by  each  such  company  and  may  be 
inquired  into  and  verified  by  the  Insurance  Commissioner, 
or  any  examiner  from  his  office,  during  any  regular  exami- 
nation of  said  company,  and  if  found  to  be  inadequate,  the 
said  company  may  be  required  to  set  aside  such  reserves 
on  claims  mentioned  in  this  section  as  may  in  the  aggre- 
gate be  deemed  reasonably  and  fairly  sufficient  by  the  In- 
surance Commissioner. 


135 

Sec  100.  Revocation  of  Licciif<cs  of  Foreign  Coinpanies. 
Any  foreign  company  autliorized  to  do  in  this  State  the 
classes  of  business  embraced  within  the  provisions  of  this 
sub-title,  failing  or  refusing  to  maintain  the  premium,  loss 
and  other  reserves  as  required  by  this  Article,  shall  have 
its  license  to  do  business  in  this  State  revoked,  until  all 
the  requirements  of  this  Article  with  reference  to  said  re- 
serves shall  have  been  fully  complied  with. 

M  lit  II  n  J  Tiisunniee  Com  pan  ic'^. 

Sec.  110.  Mutual  Companies  Miijj  Assione  A  up  Risk  E.r- 
cepi  Life  Insurance.  Any  mutual  insurance  company  or- 
ganized, licensed  or  admitted  under  the  provisions  of  this 
Article,  is  empowered  and  authorized  to  make  contracts  of 
insurance,  or  of  reinsurance,  or  may  cede  or  accept  rein- 
surance, on  the  whole  or  any  portion  of  any  risk,  provid- 
ing indemnity  from  any  loss  which  may  be  insured  against 
under  any  other  provisions  of  the  laws  of  this  State,  ex- 
cepting life  insurance.  Such  companies  and  the  business 
transacted  by  them  shall  be  regulated  by  the  provisions  of 
this  sub-title  and  by  no  other  law  relating  to  insurance,  un- 
less such  law  is  referred  to  under  this  sub-title,  and  no  laAV 
hereafter  enacted  sliall  apply  to  such  companies  unless 
they  be  expressly  designated  therein. 

Sec.  111.  Requirements-  Prior  to  Doiiuj  Bitsiiie:--^.  No 
corporation  organized  under  this  sub-title  shall  issue 
policies  or  transact  any  business  of  insurance  unless  it 
shall  comply  with  the  conditions  following,  nor  until  the 
Insurance  Commissioner  has,  by  formal  license,  authorized 
it  to  do  so,  and  such  license  shall  not  issue  until  the  cor- 
poration shall  have  complied  with  the  following  condi- 
tions : 

(a)  It  shall  hold  bona  fide  applications  for  insurance 
upon  which  it  shall  issue  simultaneously,  or  it  shall  have 
in  force,  at  least  twenty  policies  to  at  least  twenty  mem- 
bers for  the  same  kind  of  insurance,  upon  not  less  than  two 
hundred  separate  risks,  each  within  the  maximum  single 
risk  described  herein. 


136 

(b)  The  "maximum  single  risk"  shall  not  exceed  twen- 
ty per  cent,  of  the  admitted  assets,  or  three  times  the 
average  risk,  or  one  per  cent,  of  the  insurance  in  force, 
whichever  is  the  greatest,  any  reinsurance  taking  effect 
simultaneously  with  the  policy  being  deducted  in  determin- 
ing such  maximum  single  risk. 

(c)  It  shall  have  collected  a  premium  upon  each  appli- 
cation required  for  organization,  the  total  of  which  prem- 
iums shall  be  held  in  cash  or  in  securities  in  which  in- 
surance companies  are  authorized  to  invest,  and  the  total 
assets  shall  be  equal,  in  case  of  fire  or  steam  boiler  insur- 
ance, to  not  less  than  twice  the  maximum  single  risk  as- 
sumed subject  to  one  fire  or  to  one  loss,  nor  less  than  ten 
thousand  dollars,  and  in  any  other  kind  of  insurance  to  not 
less  than  five  times  the  maximum  single  risk  assumed,  and 
in  cases  of  workmen's  compensation  insurance  to  not  less 
than  fifty  thousand  dollars,  or,  in  lieu  of  complying  with 
this  sub-section  and  with  sub-section  (a)  of  this  section, 
it  shall  hold  a  surplus  equal  to  the  capital  stock  and  sur- 
plus required  of  a  stock  insurance  company  effecting  the 
same  kinds  of  insurance. 

(d)  For  the  purpose  of  transacting  employer's  liability 
and  workmen's  compensation  insurance,  the  application 
shall  cover  not  less  than  two  thousand  employees,  each 
such  employee  being  considered  a  separate  risk  for  deter- 
mining the  maximum  single  risk. 

Sec.  112.  Puhl'ic  or  Private  Corporations  as  Members. 
Any  political  sub-diA'ision  of  this  State,  or  other  public  or 
private  corporation,  board,  association,  estate  or  person, 
in  this  State  or  elsewhere,  may  make  applications,  enter 
into  agreements  for  and  hold  i)olicies  in  any  such  mutual 
insurance  company.  Any  officer,  stockholder,  trustee  or 
legal  representative  of  any  such  political  sub-division,  cor- 
poration, board,,  association,  estate  or  person,  may  be 
recognized  as  acting  for  or  in  its  behalf  for  the  purpose  of 
such  membership,  but  shall  not  be  personally  liable  upon 
such  contract  of  insurance  by  reason  of  acting  in  such 
representative  capacity.     The  right  of  any  such  political 


137 

sub-division,  or  other  corporation  organized  under  the  laws 
of  this  State,  to  participate  as  a  member  of  any  such 
niutual  insurance  company  is  hereby  declared  to  be  inci- 
dental to  the  purpose  for  which  such  political  sub-division 
or  otlier  corporation  is  organized,  and  as  much  granted  as 
the  rights  and  powers  expressly  conferred. 

Sec.  113.  Mciiihvrship  Vothu/.  Except  as  otherAvise  pro- 
vided, the  policyholder  shall  be  a  member  of  the  company 
while  the  policy  is  in  force.  Every  member  of  the  company 
shall  be  entitled  to  one  vote,  or  to  such  a  number  of  votes 
based  upon  the  insurance  in  force,  the  number  of  policies 
held,  or  the  amount  of  premium  paid,  as  may  be  provided 
in  the  by-laws.  Under  any  employer's  gTOup  policy,  the 
emj^loyer  only  shall  be  a  member  of  the  company  and  en- 
titled to  vote  as  such  member  at  the  meeting  of  the  com- 
pany. 

Sec.  114.  Pr'oiiiiiiiis.  The  maximnm  ]:Teiniuin,  or  prem- 
ium deposit  payable  by  any  member  shall  be  expressed  in 
the  policy  or  in  the  application  for  the  insurance.  Sach 
maximum  premium,  or  premium  deposit,  may  be  a  cash 
premium  and  an  additional  contingent  premium  not  less 
than  the  cash  premium,  or  may  be  solely  a  cash  premium 
with  no  contingent  premium  or  liability  to  assessment  in 
any  event.  No  policy  shall  be  issued  for  a  cash  premium 
without  an  additional  contingent  premium  unless  the  com- 
pany has  a  surplus  which  is  not  less  in  amount  than  the 
capital  stock  and  surplus  required  of  domestic  stock  com- 
panies transacting  the  same  kinds  of  insurance. 

Sec.  115.  lui-estnieuf.s  and  Deposit.^.  All  investments 
and  deposits  of  the  funds  of  any  such  company  shall  be 
made  in  its  corporate  name,  and  no  director  or  other  of- 
ficer thereof,  and  no  member  of  a  committee  having  any 
authority  in  the  investment  or  disposition  of  its  funds, 
shall  accept  or  be  the  beneficiary  of,  either  directly  or  re- 
motely, any  fee,  brokerage,  commission,  gift  or  other  con- 
sideration for  or  on  account  of  any  loan,  deposit,  purchase, 
sale,  payment  or  exchange  made  by  or  in  behalf  of  such 


138 

company,  or  be  peculiarly  interested  in  any  such  purchase 
sale,  or  loan,  either  as  borrower,  principal,  co-principal, 
agent  or  beneficiary,  except  that  if  a  policyholder,  he  shall 
be  entitled  to  all  benefits  accruing  under  the  terms  of  his 
contract.  No  investment,  sale  or  loan,  except  loans  on 
its  own  policies,  shall  be  made  which  has  not  first  been 
authorized  by  the  board  of  directors,  or  by  a  committee 
thereof  charged  with  the  duty  of  investing  or  loaning  the 
funds  of  the  company,  nor  shall  any  deposit  be  made  in  a 
bank  or  banking  institution  unless  such  bank  or  banking 
institution  has  first  been  approved  as  a  bank  of  deposit  by 
the  board  of  directors,  or  said  committee  thereof  and  un- 
less the  vote  authorizing  such  investment,  sale  or  loan,  or 
approval  of  the  place  of  deposit  has  been  duly  recorded  in 
the  books  of  the  company. 

Sec.  110.  Livfstiiiciiis  in  Real  and  Personal  Frojicriij. 
No  domestic  company  hereafter  acquiring  title  to  real  es- 
tate under  the  conditions  of  any  mortgage  owned  by  it,  or 
b}'  purchase  or  set-off  on  execution  upon  judgment  for 
debts  due  it  previously  contracted  in  the  course  of  its  busi- 
ness, or  by  other  process  in  settlement  for  debts,  shall  hold 
it  for  a  longer  period  than  five  years  without  permissiou 
granted  in  writing  by  the  Insurance  Commissioner;  nor 
shall  any  such  company  hereafter  invest  in  real  estate  ex- 
cept to  the  extent  that  may  be  necessary  for  its  convenient 
accomodation  in  the  transaction  of  its  business,  and  then 
in  no  case  to  exceed  ten  per  cent,  of  its  invested  assets,  in- 
cluding cash  in  banks. 

Such  company  shall  not  engage  in  buying  or  selling 
goods,  wares  or  merchandise,  except  articles  insured  by  it 
on  which  losses  are  claimed,  and  except  in  replacing,  re- 
building or  repairing  insured  property  as  provided  in  its 
policies,  nor  engage  in  anj-  business  otlier  than  as  specified 
in  its  charter  or  agreement  of  association  and  expressly 
authorized  by  law. 

Sec.  117.  Ixcsrrrcs.  Sncli  company  shall  maintain  un- 
earned jH'emium  and  other  reserves  in  the  same  manner, 
and  upon  the  same  basis  as  required  of  domestic  stock  in- 


I 


139 


surance  companies  transacting  the  same  kind  of  insur- 
ance; provided  that  such  companies  as  write  all,  or  the 
major  portion  of  its  policies,  to  expire  on  some  certain 
date,  or  lev}'  annual  or  periodic  assessments  against  all 
policies  in  force  payable  on  some  certain  date,  shall  main- 
tain unearned  premium  reserves  computed  pro  rata  for 
I  he  unexpired  portion  of  the  term.  All  reserves  required 
to  be  maintained  as  aforesaid,  shall  be  set  up  as  a  liability 
in  all  financial  reports  of  or  concerning  each  such  company 
filed  with  the  Insurance  Commissioner.  The  commissioner 
ma^'  prescribe  any  reasonable  basis  other  than  tlie  above 
for  reserves  for  losses  or  claims,  or  may  permit  such  re- 
serves for  losses  or  claims,  when  based  upon  the  premiunj 
income,  to  be  computed  upon  the  net  premium  income  after 
<leducting  any  so-called  dividend,  or  premium  returned  or 
credited  to  members. 

Sec.  118.  A.sf^cs.smcnts.  ^\u-\\  coiiipaDV  not  ])oss(^ssed  of 
assets  at  least  equal  to  the  unearned  premium  reserve  and 
other  liabilities,  shall  make  an  assessment  to  provide  for 
such  deficiency  upon  only  such  members  as  are  liable  to 
assessment  in  proportion  to  their  several  liabilities  ex- 
pressed in  their  policies.  Each  member  shall  be  liable  only 
on  account  of  losses  and  expenses  incurred  while  his  policy 
was  in  force,  and  he  shall  be  notified  of  such  assessment 
within  one  year  after  tlie  termination  of  such  policy;  pro- 
vided, that  the  commissioner  by  written  order,  may  relieve 
the  company  from  an  assessment  or  other  proceeding  to 
restore  such  assets  during  the  time  fixed  in  such  order; 
and  provided,  that  any  domestic  company  which  shall  be 
deficient  in  providing  the  unearned  premium  reserve  re- 
quired hereby,  may,  notwithstanding  such  deficiency,  come 
under  this  Act  on  the  condition  that  it  shall  each  year 
thereafter  reduce  such  deficiency  by  at  least  fifteen  per 
cent,  of  the  original  amount  thereof,  and  in  such  case  it 
may  increase  its  assessments  accordingly. 

Sec.  119.  Loans  For  Business  Purposes.  Any  director, 
officer  or  member  of  any  such  company,  or  any  other  per- 
son, may  advance  to  such  company  any  sum  or  sums  of 


140 

money  necessary  for  the  purpose  of  its  business,  or  to  en- 
able it  to  comply  with  any  sui'plus  requirements,  or  any 
other  requirements  of  the  laAV,  and  such  moneys,  and  such 
interest  thereon  as  may  have  been  agreed  upon,  not  ex- 
ceeding six  per  cent,  per  annum,  shall  be  payable  only  out 
of  the  surplus  remaining  after  providing  for  all  reserves 
and  other  liabilities,  and  shall  not  otherwise  be  a  liability 
or  claim  against  the  company  or  any  of  its  assets.  No 
commission  or  promotion  expenses  shall  be  paid  in  connec- 
tion with  the  advance  of  any  such  money  to  the  company, 
and  the  amount  of  such  advance  shall  be  reported  in  each 
annual  statement. 

Sec.  120.  Adintssion  of  Foreign  Companies.  Any  mutual 
insurance  company  organized  outside  of  this  State  and 
authorized  to  transact  the  business  of  insurance  on  the 
mutual  plan  in  this  State,  shall  be  admitted  and  licensed, 
subject  to  the  approval  of  the  State  Insurance  Commis- 
sioner, as  aforesaid,  to  transact  the  kinds  of  insurance  au- 
thorized by  its  charter  or  articles  of  incorporation  to  the 
extent  and  with  the  powers  and  privileges  specified  under 
this  sub- title,  and  when  it  shall  be  solvent  under  said  sub- 
title and  shall  have  complied  with  the  following  require- 
ments : 

{Si)  Filed  Avitli  the  Insurance  Commissioner  a  certified 
copy  of  its  charter  or  articles  and  a  certificate  of  the  super- 
vising insurance  official  of  the  State  in  which  it  is  incor- 
porated, that  it  is  there  organized  and  authorized  to  do 
such  business  as  it  desires  to  transact  in  this  State. 

(b)  Filed  with  the  commissioner  a  copy  of  its  by-laws 
certified  to  by  its  secretary. 

(c)  Appointed  the  insurance  commissioner  its  agent  for 
the  service  of  process,  in  any  action,  suit  or  proceeding 
brought  in  this  state,  wliicli  authority  shall  continue  so 
long  as  any  liability  shall  remain  outstanding  in  this  state. 

(d)  Filed  a  financial  statement  under  oath,  in  such  form 
as  the  commissioner  may  require,  and  have  complied  with 
other  provisions  of  the  laws  applicable  to  the  filing  of 


141 


papers  and  furnishing  information  by  stock  companies  ax)- 
pljing  for  autliority  to  transact  the  same  kinds  of 
insurance. 

(e)  If  organized  without  the  United  States,  make  and 
maintain  a  deposit,  if  any,  required  of  a  like  mutual  in- 
surance company  formed  in  this  state  for  transacting  the 
same  kinds  of  insurance  in  the  country  in  wliich  such  for- 
eign company  is  domiciled. 

(f )  Its  name  shall  not  be  so  similar  to  any  name  already 
in  use  by  any  such  existing  corporation,  company  or  asso- 
ciation organized  or  licensed  in  this  state  as  to  be  confusing 
or  misleading. 

Sec.  121.  Licenses  to  Foreign  Companies.  Upon  com- 
pliance by  any  such  company  organized  outside  of  this 
state  with  tlie  provisions  of  the  preceding  section,  such 
company  sliall  be  licensed  and  authorized  to  transact  busi- 
ness in  this  state,  subject  to  all  the  provisions  of  the  section 
immediately  following  and  to  tlie  annual  renewal  of  its 
license  at  the  times  j^rovided  for  the  renewal  of  licenses  of 
stock  insurance  companies  transacting  the  same  kinds  of 
insurance. 

Sec.  122.  Taxes,  Fees,  Reserves,  Reports,  Examinations, 
PubUcations,  etc.  Every  mutual  insurance  company, 
whether  organized  within  or  without  this  state,  shall  be 
subject  to  all  provisions  of  the  laws  of  this  state  relating  to 
policy  forms,  the  supervision  of  rates,  prohibition  of  dis- 
crimination rebates,  annual  reports,  reserves,  taxes  and 
fees,  except  as  herein  otherwise  provided,  that  applj^  or  re- 
late to  stock  insurance  companies  doing  a  similar  class  or 
classes  of  business.  All  mutual  insurance  companies  in- 
corporated under  the  laws  of  this  state  shall  pay  an  annual 
license  fee  of  one  dollar,  and  such  companies  incorporated 
elsewliere  tlian  in  tliis  state  and  authorized  to  transact 
liability,  compensation,  casualty  or  miscellaneous  lines, 
shall  pay  the  same  annual  license  fees  as  are  required  of 
stock  fire  insurance  companies;  provided,  however,  that 
when  any  other  state  imposes  upon  any  mutual  insurance 


142 


company  incorporated  under  the  laws  of  this  state,  fees, 
taxes  or  charges  in  excess  of  or  less  than  those  prescribed 
by  the  laws  of  this  state  for  such  mutual  companies  of 
other  states,  then  such  non-resident  mutual  insurance  com- 
panies shall  pay  to  the  insurance  commissioner  of  Mary- 
land the  same  taxes,  fees  or  charges  as  are,  or  would  be 
collected  by  such  other  state  from  such  mutual  insurance 
companies  incorporated  under  the  laws  of  this  state.  Every 
mutual  insurance  company,  wliether  organized  within  or 
without  this  state,  shall  make  its  annual  report  in  such 
form  and  submit  to  such  examinations  and  furnish  such 
information  as  may  be  required  by  the  commissioner. 
Whenever  such  mutual  insurance  companies  shall  furnisli 
to  their  policyliolders  in  this  state  annually,  a  detailed 
statement  of  their  financial  condition,  and  shall  also  fur- 
nish a  copy  thereof  to  the  insurance  commissioner  for  his 
approval,  they  shall  be  exempt  from  the  requirements  of 
any  laws  of  this  state  providing  for  advertising  such  state- 
ments in  any  newspaper.  So  far  as  practicable,  the  exami- 
nation of  mutual  insurance  companies  organized  outside  of 
this  state  shall  be  made  in  cooperation  with  the  insurance 
departments  of  other  states,  and  the  forms  of  annual  re- 
port shall  be  such  as  are  in  general  use  throughout  the 
United  States. 

Sec.  123.  Tax  on  Premiums ;  Exemption.  The  taxable 
premiums,  or  premium  receipts,  or  premium  deposits,  of 
any  nmtual  insurance  company  organized  in  or  admitted  to 
this  state,  for  the  purpose  of  taxation  under  any  law  of  this 
state,  shall  be  the  gross  premiums,  or  premium  deposits, 
received  for  insurance  upon  property  or  risks  located  in 
this  state,  deducting  amounts  paid  for  reinsurance  ujion 
which  a  tax  has  been  or  is  to  be  paid  in  this  state,  and  de- 
ducting premiums  or  premium  deposits,  upon  policies  not 
taken,  premiums,  or  premium  deposits,  returned  or  can- 
celled policies,  and  any  refund  or  return  made  to  policy- 
holders otlier  tlian  for  losses.  Tlie  taxes  and  fees  paid  by 
mutual  insurance  companies  under  the  provisions  of  this 
riib-title  shall  be  in  lieu  of  all  other  fees,  licenses  and  taxes, 


143 


state,  county  and  municipal,  except  such  taxes  on  real 
estate  and  tangible  personal  property  as  may  be  levied 
under  other  provisions  of  law. 

Sec.  124.  Reinsurance.  An}^  such  mutual  insurance 
company  organized  under  the  laws  of  or  admitted  to  trans- 
act insurance  in  this  state  may  by  policy,  treaty  or  other 
agreement,  cefle  to  or  accept  from  any  insurance  company 
or  insurer  licensed  in  any  state  in  the  United  States,  re- 
insurance upon  the  whole  or  any  part  of  any  risk  or  risks, 
with  or  without  contingent  liability  or  participation,  and 
witli  or  without  membersliip  in  such  mutual  insurance 
<-oruDauy;  provided,  that  no  such  reinsurance  shall  be  ef- 
fected with  any  company  or  insurer  disapproved  therefor 
by  written  order  of  the  insurance  commissioner  filed  in  liis 
office. 

Sec.  125.  Resident  Agent ;  Policy  Forms.  Any  mutual 
insurance  compan,y  organized  outside  of  this  state  shall 
comply  with  the  provisions  of  any  law  requiring  that  poli- 
cies shall  be  countersigned  and  delivered  through  a  resident 
•agent  that  are  applicable  to  stock  insurance  companies 
effecting  the  same  kinds  of  insurance;  provided  that  this 
requirement  shall  not  apply  to  transactions  of  such  com- 
panies which  have  no  agents  and  pay  no  commissions.  Such 
company  may  insert  in  any  form  of  policy  prescribed  by 
the  law  of  this  state  any  provision  or  condition  required  by 
its  plan  of  insurance  Avliicli  are  not  inconsistent  or  in  con- 
flict with  any  law  of  this  state.  Such  policy  in  lieu  of 
conforming  to  the  language  and  form  prescribed  by  sucli 
law,  may  conform  thereto  in  substance,  if  such  policy  in- 
cludes a  provision  or  endorsement  reciting  that  the  policy 
shall  be  construed  as  if  in  the  language  and  form  prescribed 
by  such  law,  and  a  copy  of  such  policy  and  endorsement,  if 
any,  shall  have  been  first  filed  with  and  shall  not  have  been 
disapproved  by  the  commissioner. 

Sec.  126.  Dividends  on  Policies.  From  time  to  time  tlie 
directors  of  any  such  company  may,  by  vote,  fix  and  de- 
termine the  percentage  of  dividend  or  expiration  return 


144 


of  premium  to  be  paid  on  expiring  policies,  whicli  per- 
centages may  differ,  following  the  different  loss  experience 
of  different  classes  of  risks  of  the  same  term.  But  all  pol- 
icies insuring  risks  in  the  same  classification,  shall  have  an 
equal  rate  of  dividend  or  exj^iration  return  of  premium  for 
the  same  term,  and  in  case  of  an  assessment,  the  rate 
thereof  may  be  dilf'erent  for  each  different  class  of  risks, 
provided  that  ever}'^  polic^^  in  a  company  thus  dividing  its 
risks  into  two  or  more  classifications  shall,  when  issued, 
bear  an  endorsement  clearly  indicating  the  class  to  which 
it  is  assigned.  Every  policyholder  of  a  domestic  company, 
and  every  policyholder  in  tliis  state  of  a  company  of  an- 
other state  or  foreign  country,  shall  be  notified  at  his  last 
known  address  within  six  months  after  the  expiration  of 
liis  policy  of  the  amount  of  any  dividend  or  expiration  of 
premium  declared  and  payable  thereon,  unless  in  the  mean- 
time such  dividend  or  return  has  been  paid  in  cash  or 
applied  in  payment  of  the  premium  on  the  renewal  of  tlie 
policy. 

Sec.  127.  Impairment  of  Assets;  Insolvenct/.  If  it  ap- 
pears to  the  insurance  commissioner  after  an  examination 
made  by  liim,  or  by  an  examiner  appointed  by  him,  that  the 
assets  or  capital  of  any  mutual  insurance  company  are 
insufficient  to  justify  its  continuance  in  business,  he  shall 
determine  the  amount  of  such  deficiency  and  issue  a  written 
requisition  to  the  officers  of  the  company  requiring  them 
to  make  good  witliin  a  time  to  be  specified  therein,  not  less 
than  thirty  or  more  than  ninety  days  from  the  service  of 
such  requisition.  Such  service  may  be  made  by  mail,  di- 
rected to  the  company  at  its  liome  office  as  specified  in  its 
charter.  Upon  the  service  of  such  requisition  the  directors 
of  the  company  shall  forthwith  cause  such  deficiency  to  be 
mxide  good  and  proof  to  be  filed  with  the  Commissioner 
within  the  time  specified  in  the  reiiuisition  that  the  same 
has  been  made  good.  For  any  losses  accruing  upon  new 
risks  taken  after  the  expiration  of  sucli  time  and  before 
such  deficiency  shall  be  made  good,  the  directors  of  tlie  com- 
;  my  shall  jointly  and  severally  be  personally  liable  there- 


145 

for.  If  such  deflcieDcy  shall  not  be  made  good  within  the 
time  specified  in  such  requisition  and  satisfactory  proof 
thereof  filed  with  the  commissioner,  the  company  shall  be 
deemed  insolvent  and  may  be  proceeded  against  as  an  in- 
solvent corporation  in  tlie  manner  authorized  by  law. 

Sec.  128.  Rules  for  Prevention  of  Accidents.  The  mem- 
bers of  any  mutual  insurance  company  writing  workmen's 
compensation  or  liability  insurance  contracts  may  make 
reasonable  rules  and  regulations,  not  in  conflict  with  the 
laws  of  this  state,  for  the  betterment  of  the  industries  in 
which  they  are  engaged,  including  particularly  rules  and 
regulations  for  the  prevention  of  accidents  to  employees 
on  the  premises  of  the  employer  members,  and  they  may 
impose  fines  and  forfeitures  for  tlie  violation  of  any  such 
rules  and  regulations.  Such  rules  and  regulations  and 
fines  and  forfeitures  shall  be  submitted  to  the  state  in- 
dustrial accident  commission  and,  when  approved  by  it, 
shall  be  enforced  by  the  directors  of  any  sucli  company. 
Should  the  memb'ers  of  such  company  fail  to  make  such 
reasonable  rules  and  regulations,  the  directors  thereof  shall 
make  and  submit  tliem  to  the  state  industrial  accident  com- 
mission for  its  approval,  and  when  approved  by  said 
commission  tlie  directors  of  such  company  shall  enforce 
them.  If  such  company  appoints  one  or  more  inspectors 
or  experts  for  the  purpose  of  accident  prevention,  they 
shall  have  free  access  to  all  premises  of  employer  members, 
where  work  is  being  conducted  during  regular  working 
hours.  The  policy  of  any  member  neglecting  to  provide 
suitable  safety  appliances  as  provided  by  law,  or  as  required 
by  the  rules  and  regulations  of  the  company  may  be  can- 
celled and  terminated  by  the  board  of  directors,  after  giving 
such  member  notice  of  such  cancellation  ten  days  prior  to 
its  becoming  effective. 

Sec.  129.  Employer  and  Employees  May  Af/ree  Upon 
Scheme  of  Compensation.  Nothing  in  this  Article  shall 
prevent  any  employer  and  his  or  its  employees,  subject  to 
the  approval  of  the  State  Industrial  Accident  Commission, 


146 

from  agreeiDg  iij)on  and  concluctiiig  hbj  scheme  of  compen- 
sation, benefit  or  insurance  for  the  purpose  of  insuring  the 
payment  of  compensation  or  anj'  other  liability  of  such  em- 
ployer to  his  emplojTes,  or,  in  the  event  of  death',  to  the  de- 
pendents of  such  employees,  as  the  result  of  accidental 
injury  to  such  employees,  or  for  insuring  to  such  employees 
sick,  old  age  or  other  benefits;  provided  any  such  scheme 
of  compensation,  benefit  or  insurance  shall  maintain  the 
same  reserves  as  are  required  under  Section  117  of  mutual 
insurance  companies  for  the  same  kind  of  business,  and 
shall  make  reports  to  the  Insurance  Commissioner  and 
shall  be  subject  to  examination  by  him  as  provided  in  Sec- 
tion 122  for  mutual  insurance  companies.  B.ut  no  such 
scl'.eme  shall  assume  any  insurance  risk  until  it  receives  a 
license  from  the  Insurance  Commissioner,  who  shall  not 
grant  or  issue  to  it  any  license  until  the  State  Industrial 
Accident  Commission  certifies  to  him  its  approval  of  the 
plan  of  such  scheme;  and  no  such  scheme  shall  be  so  ap- 
proved or  certified  by  the  State  Industrial  Accident  Com- 
mission unless  there  are  at  least  five  hundred  employees  to 
be  insured  therein  and  the  premium  rates  to  be  paid  are, 
in  the  judgment  of  said  commission,  adequate  for  benefits 
promised,  and  unless  the  scheme  provides  for  extra  pay- 
ments thereto  in  the  event  they  should  be  necessary  to 
maintain  the  required  reserves.  But  the  approval  of  any 
such  scheme  for  the  insurance  of  so  small  a  number  of  em- 
ployees as  five  hundred  shall  be  discretionary  with  the 
State  Industrial  Accident  Commission,  wdiich  shall  with- 
hold its  approval  of  any  such  scheme  for  the  insurance  of 
a  smaller  number  than  two  thousand  employees  unless  the 
financial  plan  of  the  scheme  is  especially  strong,  or  the 
risk  or  hazard  is  exceptionally  low. 

If  the  State  Industrial  Accident  Commission  shall  at 
any  time  find  that  the  scheme  no  longer  fulfills  the  re- 
quirements of  this  section,  or  is  not  fairly  administered,  or 
other  valid  and  substantial  reasons  therefor  exist,  it  shall 
withdraw  its  approval  and  so  notify  the  Insurance  Com- 
missioner, who  shall  revoke  the  license  of  such  scheme. 


147 

When  such  a  license  is  revoked  or  expires,  any  moneys  or 
securities  held  for  the  purposes  of  this  scheme,  shall,  after 
due  provision  has  been  made  to  discharge  the  liabilities 
already  accrued,  be  disposed  of  or  distributed  as  may  be 
arranged  between  the  employer  and  his  employees,  or  as 
may  be  determined  by  the  commission,  or  in  the  event  of  a 
difference  of  opinion,  according  to  the  rights  of  the  parties. 
Where  such  an  approved  or  certified  scheme  of  compen- 
sation, benefit,  or  insurance  is  in  effect,  the  employer  shall 
answer  all  inquiries  in  regard  thereto  that  may  be  required 
by  the  State  Industrial  Accident  Commission. 

Sec.  130.  Penalties.  Auj  person  or  corporation  viohit- 
ing  any  provision  under  this  sub-title  shall  be  guilty  of  a 
misdemeanor,  and  upon  conviction  shall  be  punished  by  a 
fine  of  not  less  than  fifty  dollars,  or  more  than  five  hun- 
dred dollars,  and  the  Insurance  Commissioner  shall  have 
power  to  revoke  the  license  of  any  such  person  or  corpora- 
tion. 

Sec.  131.  Iiiconsisfeiit  Prorisioii.s  of  Jjiir  RvjieitJaJ.  All 
laws  or  parts  of  laws  in  conflict  with  the  provisions  of  this 
sub-title,  so  far  as  companies  organized  or  admitted  under 
said  sub-title  are  concerned,  are  hereby  repealed  in  so  far 
as  they  are  so  inconsistent;  provided,  however,  tliat  mutual 
fire  insurance  companies  organized  prior  to  the  first  day  of 
January  in  the  year  nineteen  hundred  and  sixteen  and  now 
lawfully  doing  business  upon  the  plan  of  taking  deposit 
notes  for  a  percentage  of  the  amount  insured  by  its  policies, 
and  making  a  call  or  assessment  thereon  for  expenses  and 
for  the  payment  of  losses  only  after  such  losses  are  incur- 
red, may  continue  such  system  of  business,  and  such  de- 
posit notes  shall  constitute  the  entire  liability  of  their 
members. 

Reciprocal  Exchanges  and  Inter-Insurers. 

Sec.  132.  Reciprocal  or  Inier-Insuranee  Contracts;  Ex- 
emptions. Individuals,  partnerships  and  corporations  of 
this  State,  hereby  designated  as  subscribers,  are  hereby 


148 


authorized  to  excliange  reciprocal  or  inter-insurance  con- 
tracts with  each  other  or  with  individuals,  partnerships 
and  corporations  of  other  States  and  counties  providing 
indemnity  among  themselves  from  any  loss  which  may  be 
insured  against  under  other  provisions  of  the  laws  of  the 
State,  excepting  life,  health  and  personal  accident  insur- 
ance. Sucli  contracts  and  the  exchange  thereof  and  such 
subscribers,  their  attorneys  and  representatives,  shall  be 
regulated  by  the  provisions  under  this  sub-title  and  by  no 
other  law  relating  to  insurance,  unless  such  law  is  refer- 
red to  under  this  sub-title,  and  no  law  liereafter  enacted 
shall  apply  to  them,  unless  they  be  expressly  designated 
therein. 

Sec.  133.  Execution  of  SiicJi  Contracts.  Such  contracts 
may  be  executed  by  an  attorney,  agent  or  other  represen- 
tative, herein  designated  attorney,  duly  authorized  and 
acting  for  such  subscribers,  and  such  attorney  may  be  a 
corporation.  The  office  or  offices  of  such  attorney  may  be 
maintained  at  such  place  or  places  as  may  be  designated 
by  the  subscribers  in  the  power  of  attorney. 

Sec.  134.  Attomeij  ^hnU  File  Verified  Declaration.  Such 
subscribers  so  contracting  among  tliemselves,  shall, 
through  their  attorne}^,  file  with  the  Insurance  Commis- 
sioner a  declaration,  verified  by  tlie  oath  of  such  attorney, 
or  where  such  attorney  is  a  corporation,  by  oath  of  the 
proper  officer  thereof,  setting  forth : 

(a)  Tlie  name  of  the  attorney  and  the  name  or  designa- 
tion under  Avhicli  such  contracts  are  issued,  which  name  or 
designation  shall  not  be  so  similar  to  any  name  or  desig- 
nation adopted  by  any  attorney,  or  by  any  insurance  or- 
ganization in  the  United  States,  prior  to  the  adoption  of 
such  name  or  designation  by  the  attorney,  as  to  confuse  or 
deceive. 

(b)  The  kind  or  kinds  of  insurance  to  be  effected  or  ex- 
changed. 


I 


149 

(c)  A  copy  of  the  form  of  policy  contract  or  agreement 
under  or  by  which  such  insurance  is  to  be  etfected  or  ex- 
changed. 

(d)  A  cop3'  of  the  form  of  power. of  attorney  or  other 
authority  of  such  attorney  under  which  such  insurance  is 
to  be  effected  or  exchanged. 

(e)  The  location  of  the  office  or  offices  from  which  such 
contracts  or  agTeements  are  to  be  issued. 

(f)  That  applications  have  been  made  for  indemnity 
u]Hm  at  least  seventy-five  se])arate  risks  aggregating  not 
less  than  one  and  one-half  million  dollars  as  represented  by 
executed  contracts  or  bona  fide  applications  to  become  effec- 
tive concurrently,  or,  in  case  of  liability  and  compensation 
insurance,  covering  a  total  payroll  of  not  less  than  four 
million  dollars. 

(g)  That  there  is  on  deposit  with  such  attorney  and 
available  for  the  payment  of  losses,  a  sum  of  not  less  than 
fifty  thousand  dollars;  provided,  however,  that  in  case  of 
liability  and  compensation  insurance  such  sum  shall  be 
not  less  than  one  hundred  thousand  dollars. 

(h)  A  financial  statement  in  form  prescribed  for  the 
annual  report. 

Sec.  135.  Service  of  Process.  Concurrently'  with  the 
filing  of  the  declaration  provided  for  by  the  terms  of  sec- 
tion 134,  the  attorney  shall  file  with  the  Insurance  Com- 
missioner an  instrument  in  writing,  executed  by  him  for 
said  subscribers,  conditioned  that  upon  the  issuance  of 
the  certificate  of  authority  provided  for  in  section  140, 
action  may  be  brought  in  the  county  or  city  in  which  the 
property  or  risk  insured  thereunder  is  situated,  and  service 
of  process  may  be  had  upon  the  Insurance  Commissioner 
in  all  suits  in  this  State  arising  out  of  such  policies,  con- 
tracts or  agTeements,  which  service  shall  be  valid  and  bind- 
ing upon  all  subscribers  exchanging  at  any  time  reciprocal 
or  inter-insurance  contracts  through  such  attorneys.  Three 
copies  of  such  process  shall  be  served  and  the  commis- 
sioner shall  file  one  copy,  forward  one  copy  to  said  attor- 
ney and  return  one  copy  with  his  admission  of  service. 


150 

kSec.  136.  Limit  of  Liahilitij.  There  shall  be  filed  with  the 
iDsiiraiice  Commissioner  by  such  attorney,  whenever  the 
commissioner  shall  so  require,  a  statement  under  oath  of 
sudi  attorney  showin-g  the  maximum  amount  of  indemnity 
upon  a  single  risk,  and  no  subscriber  sliall  assume  on  a 
.single  risk  an  amount  greater  than  ten  per  cent  of  the  net 
Avorth  of  such  subscriber. 

Sec.  137.  Reserves;  Juijxiirnieut  of  Assets.  There  shall 
at  all  times  be  maintained  assets  in  cash  or  securities  au- 
tliorized  by  the  laws  of  the  State  in  wdiich  the  principal 
office  is  located,  for  the  investment  of  funds  if  insurance 
companies  doing  the  same  kind  of  business,  an  amount 
equal  to  100  per  cent,  of  the  net  unearned  premiums  or  de- 
posits collected  and  credited  to  the  accounts  of  subscrib- 
ers, or  50  jjer  cent,  of  the  net  annual  advance  premiums  or 
deposits  collected  and  credited  to  the  accounts  of  subscrib- 
ers on  policies  having  one  year  or  less  to  run  and  pro  rata 
on  those  for  longer  periods.  In  addition  to  the  foregoing 
sum,  in  the  case  of  liability  and  workmen's  compensation 
insurance,  there  shall  be  maintained  as  a  reserve  in  cash 
or  such  securities,  assets  sufficient  to  discharge  all  liabili- 
ties on  all  outstanding  losses  arising  under  policies  issued; 
the  same  to  be  calculated  on  the  basis  of  net  premiums  or 
deposits  as  in  this  section  defined  and  in  accordance  with 
the  laws  of  the  State  relating  to  similar  reserves  for  com- 
panies insuring  similar  risks.  Net  premiums  or  deposits 
as  used  in  this  section  shall  be  construed  to  mean  the  ad- 
vance payments  made  by  subscribers  after  deducting  there- 
from the  amount  specifically  provided  in  the  subscribers' 
agreements  for  expenses.  If  at  any  time  the  assets  on  hand 
are  less  than  the  foregoing  requirements,  or  less  than  the 
1100,000.00,  whichever  is  the  greater,  where  the  attorney 
is  exchanging  contracts  covering  liability  or  workmen's 
compensation  insurance,  the  subscribers  shall  make  up  the 
deficiency.  Whenever  such  assets  are  less  than  the  amount 
required  above,  or  less  than  |50,000.00,  whichever  is  the 


151 

greater,  if  the  attorne^^  is  excIiangiDg  coDtracts  otlier  than 
those  coveriDg  liability  and  workmen's  compensation  in- 
surance, the  subscribers  shall  make  up  the  deficiency. 

Sec.  138.  Annual  Jxcports;  E.rinn  I  nations.  Siu-h  attor- 
ney shall,  within  the  time  limited  for  filing  the  annual  re- 
port by  insurance  companies  transacting  the  same  kind  of 
business,  make  a  report  to  the  Insurance  Commissioner  for 
each,  calendar  year,  showing  the  financial  condition  of  af- 
fairs at  the  office  where  such  contracts  are  issued,  and  shall 
furnish  such  additional  information  and  reports  as  may  be 
required  to  show  the  total  premium  or  deposits  collected, 
and  total  losses  paid,  the  total  amounts  returned  to  sub- 
scribers and  tlie  amounts  retained  for  expenses.  Provided, 
however,  that  such  attorney  shall  not  be  required  to 
furnisli  the  names  and  addresses  of  any  subscribers.  The 
business,  atCairs,  records  and  assets  of  such  organization 
shall  be  subject  to  examination  by  the  Insurance  Commis- 
sioner at  the  expense  of  the  organization  examined. 

Sec.  139.  All  Domestic  Corporations  Authorized  to  Ex- 
change Contracts  of  Insurance.  Any  corporation  now  or 
hereafter  organized  under  the  laws  of  this  State,  shall,  in 
addition  to  the  rights,  powers  and  franchises  specified  in 
its  articles  of  incorporation,  have  full  power  and  authority 
to  exchange  contracts  of  the  kind  and  character  herein 
mentioned.  The  right  to  exchange  such  contracts  is  hereby 
declared  to  be  incidental  to  the  purposes  for  which  such 
corporations  are  organized  and  as  much  granted  as  the 
rights  and  powers  expressly  conferred. 

Sec.  1-10.  Certificate  of  Authority.  Each  attorney  by 
whom  or  through  whom  are  issued  any  policies  of  or  con- 
tracts for  indemnity  of  the  character  referred  to  under  this 
sub-title,  shall  procure  from  the  Insurance  Commissjoner 
annually  a  certificate  of  authority  stating  that  all  the  re- 
quirements of  this  x\ct  have  been  complied  with,  and  upon 
such  compliance  and  the  payment  of  the  fees  and  taxes  re- 
quired by  this  Act,  the  Insurance  Commissioner  shall  is- 
sue such  certificate. 


152 

Sec.  141.  TujL-cs  and  Fees;  Agents'  Licenses.  lu  lieu  of 
all  other  taxes,  licenses  or  fees  whatever,  state  or  local, 
such  attorney,  except  such  as  shall  have  the  princiijal  of- 
fice located  m  this  State,  shall  j)aj  annually  on  account  of 
the  transaction  of  such  business  in  this  State,  a  license  fee 
of  tAventy-five  dollars  and  a  tax  of  two  per  cent,  upon  the 
gross  premiums  or  deposits  during  the  preceding  calendar 
year,  deducting  all  amounts  returned  to  subscribers  or 
credited  to  their  accounts  other  than  for  losses;  except  that 
where  other  States  collect  from  reciprocal  or  inter-insurers 
having  the  princifjal  office  of  the  attorney  located  in  this 
State  and  exchanging  indemnity  in  such  States,  fees,  taxes, 
or  charges  in  excess  of  or  less  than  those  prescribed  by  this 
section,  then  such  attorneys  having  their  principal  offices 
in  such  States  and  exchanging  indemnity  in  this  State, 
shall  pay  to  the  Insurance  Commissioner  of  Maryland  the 
same  fees,  taxes  and  charges  as  are  collected  or  would  be 
collected  by  such  other  States  from  reciprocals  or  inler- 
insurers  having  the  ]jrinci])al  office  of  the  attornev  locate  1 
in  Marj'land  and  exchanging  indemnity  in  such  States; 
and  where  any  such  attorney  shall  appoint  an  agent,  solici- 
tor or  representative  to  solicit  or  negotiate  contracts  of  in- 
surance in  this  State,  he  shall  first  comply  with  section  60 
of  this  Article,  and  upon  full  compliance  with  said  section, 
said  agent,  solicitor  or  representative,  shall  receive  a  li- 
cense upon  pacing  the  following  fees,  to  wit:  For  license 
to  represent  such  addition  or  exchange  issuing  contracts 
or  giving  coverage  against  loss  by  fire,  a  fee  of  five  dollars, 
and  for  coverage  other  than  fire,  a  fee  of  two  dollars.  All 
such  licenses  shall  expire  at  midnight  on  the  31st  day  of 
December  following  the  date  of  issue. 

Sk(\  142.  Penalties.  Any  attorney  who  sliall  exchange 
any  contracts  of  indemnity  of  the  kind  and  character 
specified  under  this  sub-title,  or  any  attorney,  agent  or 
any  person  representing  him,  who  shall  solicit  or  negotiate 
any  application  for  same  without  the  attorney  first  com- 
plying with  the  foregoing  provisions,  shall  be  deemed 
guilty  of  a  misdemeanor,  and  on  conviction  thereof,  shall 


153 


be  subject  to  a  fine  of  not  less  than  onelmndred  dollars,  or 
more  than  one  thousand  dollars.  For  the  purpose  of  or- 
ganization and  upon  issuance. of  permit  by  the  Insurance 
Commissioner,  power  of  attorney  and  applications  may  be 
solicited  without  license,  but  no  attorney,  agent  or  other 
person  shall  make  any"  contracts  of  indemnity  until  he 
shall  comply  with  all  the  provisions  of  this  sub-title.  In 
addition  to  the  foregoing  penalties,  and  where  not  other- 
wise provided,  the  penalty  for  failure  or  refusal  to  comply 
with  any  of  the  terms  and  provisions  of  this  sub-title  upon 
the  part  of  the  attorney,  shall  be  the  refusal,  suspension 
or  revocation  of  the  certificate  of  authority  or  license  by 
the  Insurance  Commissioner  and  publication  of  his  act, 
after  due  notice  and  opportunity  for  hearing  have  been 
given  such  attorney,  so  that  he  may  appear  and  show  cause 
why  such  action  should  not  be  taken. 

Sec.  143.  Fraternal  Beneficiary  Association  Defined. 
x\ny  corporation,  society,  order  or  association,  without  cap- 
ital stock  organized  and  carried  on  solely  for  the  mutual 
benefit  of  its  members  and  their  beneficiaries,  and  not  for 
profit,  and  having  a  lodge  system  with  ritualistic  form  of 
work,  and  representative  form  of  government,  and  which 
shall  make  provision  for  the  payment  of  benefits  in  ac- 
cordance with  section  147  thereof,  is  hereby  declared  to  be 
a  fraternal  beneficiary  association. 

Sec.  144.  Lodge  System  Defined.  Any  association  having 
a  supreme  governing  or  legislative  body  and  subordinate 
lodges  or  branches,  by  whatever  name  known,  into  which 
members  shall  be  elected,  initiated  and  admitted  in  ac- 
cordance with  its  constitution,  laws,  rules,  regulations  and 
prescribed  ritualistic  ceremonies,  which  subordinate  lodges 
or  branches  shall  be  required  by  the  laws  of  such  associa- 
tion to  hold  regular  or  stated  meetings  at  least  once  in 
each  month,  shall  be  deemed  to  be  operating  on  the  lodge 
system. 


154 


Sec.  145.  Representative  Form  of  Government  Defined. 
Any  such  association  shall  be  deemed  to  have  a  representa- 
tive form  of  government  when  it  shall  provide  in  its  con- 
stitution and  laws  for  a  supreme  legislative  or  governing 
body,  composed  of  representatives  elected  either  directly  or 
indirectly  by  the  members,  together  with  such  other  mem- 
bers as  may  be  i)rescribed  by  its  constitution  and  laws; 
provided,  that  the  elective  members  shall  constitute  a  ma- 
jority in  number  and  not  liave  less  than  two-thirds  of  the 
votes,  nor  less  than  the  votes  required  to  amend  its  con- 
stitution and  laws;  and  provided  further,  that  the  meetings 
of  the  supreme  or  governing  body,  and  the  election  of  of- 
ficers, representatives  or  delegates  shall  be  held  as  often 
as  once  in  four  years.  Tlie  members,  officers,  representa-. 
fives  or  delegates  of  a  fraternal  beneficiary  association 
shall  not  vote  by  proxy. 

Sec.  146.  Exemptions.  Except  as  herein  provided,  such 
association  shall  be  governed  by  this  act  and  shall  be 
exempt  from  all  provisions  of  the  insurance  laws  of  this 
state,  not  only  in  its  governmental  relations  with  the  state, 
but  for  every  otlier  purpose,  and  no  law  hereafter  enacted 
shall  apply  to  tliem  unless  they  be  expressly  designated 
therein. 

Sec.  147.  Benefits.  Every  association  transacting  busi- 
ness under  this  act  sliall  provide  for  the  payment  of  deatli 
benefits,  and  may  provide  for  the  payment  of  benefits  in 
case  of  temporary  or  permanent  pliysical  disability,  eitlier 
as  a  result  of  disease,  accident  or  old  age;  provided,  the 
period  of  life  at  which  the  payment  of  benefits  for  disability 
on  account  of  old  age  sliall  commence,  shall  not  be  more 
than  seventy  years;  and  may  provide  for  monuments  or 
tombstones  to  the  memory  of  its  deceased  members  and  for 
tlie  payment  of  funeral  benefits.  Such  association  shall 
liave  tlie  power  to  give  a  member,  when  permanently  dis- 
abled or  on  attaining  the  age  of  seventy,  all  or  such  portion 
of  the  face  value  of  his  certificate,  as  the  laws  of  the  asso- 
ciation may  provide;  provided,  that  nothing  in  this  Act 
conlained  shall  be  so  construed  as  to  prevent  the  issuing 


155 


of  benefit  certificates  for  a  term  of  years  less  than  the 
whole  of  life  which  are  payable  upon  the  death  or  disability 
of  the  member  occurring  within  the  term  for  which  the 
benefit  certificate  may  be  issued.  Such  association  shall, 
upon  written  application  of  the  member,  have  the  power 
to  accept  a  part  of  the  periodical  contributions,  in  cash, 
and  charge  the  remainder,  not  exceeding  one-half  of  the 
periodical  contribution,  against  the  certificate  with  inter- 
est payable  or  compounded  annually  at  a  rate  not  lower 
than  four  per  cent,  per  annum;  provided,  that  this  privi- 
lege shall  not  be  granted  except  to  associations  wliich  have 
readjusted  or  may  hereafter  readjust  their  rates  of  contri- 
butions, and  to  contracts  affected  by  such  readjustment. 

Any  association  which  shall  show  by  the  annual  valua- 
tion hereinafter  provided  for  that  it  is  accumulating  and 
maintaining  the  reserve  necessary  to  enable  it  to  do  so, 
under  a  table  of  mortality  not  lower  than  the  American 
Experience  Table  with  four  per  cent,  interest,  m.aj  grant 
to  its  members  extended  and  paidup  protection  or  such 
withdrawal  equities  as  its  constitution  and  laws  may  pro- 
vide; provided,  that  such  grants  shall  in  no  case  exceed  in 
value  the  portion  of  the  reserve  to  the  credit  of  such  mem- 
bers to  whom  they  are  made. 

Sec.  148.  Beiieficimies.  The  payment  of  death  benefits 
shall  be  confined  to  wife,  husband,  relative  by  blood  to  the 
fourth  degree,  father-in-law,  mother-in-law,  son-in-law, 
daughter-in-law,  stepfather,  stepmother,  stepchildren, 
children  by  legal  adoption,  or  to  a  person  or  persons  de- 
pendent upon  the  member;  provided,  that  if  after  the  issu- 
ance of  the  original  certificate  the  member  shall  become 
dependent  upon  an  incorporated  charitable  institution,  he 
shall  have  the  privilege,  with  the  consent  of  the  associa- 
tion, to  make  such  institution  his  beneficiary.  Within  the 
above  restrictions,  each  member  shall  have  the  right  to 
designate  his  beneficiary,  and,  from  time  to  time,  have  the 
same  changed  in  accordance  with  the  laws,  rules  or  regu- 
lations of  the  association,  and  no  beneficiary  shall  have  or 
obtain  any  vested  interest  in  the  said  benefit  until  the  same 


156 

lias  become  due  and  payable  upon  the  death  of  the  said 
member;  provided,  that  any  association  may,  by  its  laws 
limit  the  scope  of  beneficiaries  within  the  above  classes. 

Sec.  149.  Qualifications  for  Membership.  Any  associa- 
tion may  admit  to  beneficial  membership  any  person  not 
less  than  sixteen  and  not  more  than  sixty  years  of  age, 
who  has  been  examined  by  a  legally  qualified  physician  and 
whose  examination  has  been  supervised  and  approved  in 
accordance  with  the  laws  of  the  association ;  provided,  that 
any  beneficiary  member  of  such  association  who  shall  ap- 
ply for  a  certificate  providing  for  disability  benefits  need 
not  be  required  to  pass  an  additional  medical  examination 
therefor.  Nothing  herein  contained  shall  prevent  such  as- 
sociation from  accepting  general  or  social  members. 

Sec.  150.  Certificate.  Every  certificate  issued  by  any 
such  association  shall  specify  the  amount  of  benefit  pro- 
vided thereby,  and  the  certificate,  the  charter  or  articles  of 
incorporation,  or,  if  a  voluntary  association,  the  articles 
of  association,  tlie  constitution  and  laws  of  the  association 
and  the  application  for  membership  and  medical  examina- 
tion, signed  by  the  applicant,  and  all  amendments  to  each 
thereof,  shall  constitute  tlie  agreement  between  the  asso- 
ciation and  tlie  member  and  the  copies  of  the  same  certified 
by  the  secretary  of  the  association  or  corresponding  officer, 
shall  be  received  in  evidence  of  the  terms  and  conditions 
thereof,  and  any  charges,  additions  or  amendments  to  said 
charter  or  articles  of  incorporation  or  articles  of  associa- 
tion, if  a  voluntary  association,  constitution  or  laws  duly 
made  or  enacted  subsequent  to  the  issuance  of  the  benefit 
certificate  sliall  bind  the  member  and  his  beneficiaries,  and 
shall  govern  and  control  the  agi'eement  in  all  respects  the 
same  as  though  such  changes,  additions  or  amendments 
had  been  made  prior  to  and  were  in  force  at  the  time  of  the 
application  for  membership. 

Sec.  151.  Funds.  Any  association  may  create,  maintain, 
invest,  disburse  and  apply  an  emergency,  surplus  or  other 
similar  funds  in  accordance  with  its  laws.     Unless  other- 


157 

wise  provided  in  the  contract,  such  funds  shall  be  held,  in- 
vested and  disbursed  for  the  use  and  benefit  of  the  asso- 
ciation, and  no  member  or  beneficiary  shall  have  or  ac- 
quire individual  rights  therein  or  become  entitled  to  any 
apportionment  or  the  surrender  of  any  part  thereof,  except 
as  provided  in  section  147  of  this  Article.  The  funds  from 
which  benefit  shall  be  paid  and  the  funds  from  which  the 
expenses  of  the  association  shall  be  defrayed,  shall  be  de- 
rived from  periodical  payments  by  the  members  of  the 
association,  and  accretions  of  said  funds;  provided,  that  no 
association,  domestic  or  foreign,  shall  hereafter  be  incor- 
porated or  admitted  to  transact  business  in  this  State, 
which  does  not  provide  for  stated  periodical  contributions 
sufficient  to  provide  for  mortuary  obligations  contracted, 
when  valued  upon  the  basis  of  the  National  Fraternal  Con- 
gress Table  of  Mortality-  as  adopted  by  the  National  Fra- 
ternal Congress  August  23,  1899,  or  any  higher  standard 
Avi-th  interest  assumption  not  more  than  four  per  cent,  per 
annum,  nor  write  or  accept  members  for  temporary  or  per- 
manent disability  benefits  except  upon  tables  based  upon 
reliable  experience,  with  an  interest  assumption  not  higher 
than  four  per  cent,  per  annum. 

Se(\  152.  Deferred  Paj/mciit.s.  Deferred  payments  or  in- 
stallments of  claims  shall  be  considered  as  fixed  liabilities 
on  the  happening  of  the  contingency  upon  which  such  pay- 
ments or  installments  are  thereafter  to  be  paid.  Such  lia- 
bility shall  be  the  present  value  of  such  future  payments 
or  installments,  upon  the  rate  of  interest  and  mortality  as- 
sumed by  the  association  for  valuation,  and  every  associa- 
tion shall  maintain  a  fund  sufficient  to  meet  such  liability, 
regardless  of  proposed  future  collections  to  meet  any  such 
liabilities. 

Sec.  153.  Inrestments.  Every  association  shall  invest 
its  funds  only  in  securities  permitted  by  the  laws  of  this 
State  for  the  investment  of  the  assets  of  life  insurance  com- 
panies; provided,  that  any  foreign  association  permitted 
or  seeking  to  do  business  in  this  State,  which  invests  its 


158 


funds  in  accordance  with  the  laws  of  the  State  in  which  it 
is  incorporated  shall  be  held  to  meet  the  requirements  of 
this  Act  for  the  investment  of  funds. 

Sec.  154.  Distrihut ion  of  Funds.  Every  provision  of  the 
laws  of  the  association  for  payment  by  members  of  such 
association,  in  whatever  form  made,  shall  distinctly  state 
the  purpose  of  the  same  and  the  proportion  thereof  which 
may  be  used  for  expenses;  and  no  part  of  the  money  col- 
lected for  mortuary  or  disability  purposes  or  the  net  accre- 
tions of  either  or  any  of  said  funds  shall  be  used  for  ex- 
penses. 

Sec.  155.  Organization.  Seven  or  more  persons,  citizens 
of  the  United  States,  and  a  majority  of  whom  are  citizens- 
of  this  State,  who  desire  to  form  a  fraternal  beneficiary 
association  as  defined  by  this  Act,  may  make  and  sign  (giv- 
ing their  addresses)  and  acknowledge  before  some  officer 
competent  to  take  acknowledgment  of  deeds,  articles  of  in- 
corporation, in  which  shall  be  stated: 

First.  The  proposed  corporate  name  of  the  association, 
which  shall  not  so  closely  resemble  the  name  of  any  asso- 
ciation or  insurance  company  already  transacting  business 
in  this  State  as  to  mislead  the  public  or  to  lead  to  confu- 
sion. 

Second.  The  purpose  for  which  it  is  formed — which  shall 
not  include  more  liberal  powers  than  are  granted  by  this 
Act,  provided,  that  any  lawful,  social,  intellectual,  educa- 
tional, charitable,  benevolent,  moral  or  religious  ad^iui- 
tages  may  be  set  forth  among  the  purposes  of  the  associa- 
tion— and  the  mode  in  which  its  corporate  powers  are  to 
be  exercised. 

Third.  The  name,  residence  and  official  titles  of  all  the 
officers,  trustees,  directors  or  other  persons  who  are  to  liave 
and  exercise  the  general  control  and  management  of  the 
affairs  and  funds  of  the  association  for  the  first  year,  or 
until  the  ensuing  election,  at  which  all  such  officers  shall 


159 


be  elected  by  the  supreme  legislative  or  goyerning  body, 
which  election  shall  be  held  no  later  than  one  year  from  the 
date  of  the  issuance  of  the  permanent  certificate. 

Such  articles  of  incorporation  and  duly  certified  copies 
of  the  constitution  and  laws,  rules  and  regulations,  and 
copies  of  all  proposed  forms  of  benefit  certificates,  appli- 
cations therefor  and  circulars  to  be  issued  by  such  associa- 
tion, and  a  bond  in  the  sum  of  five  thousand  dollars,  with 
sureties  approved  by  the  Insurance  Commissioner,  con- 
ditioned upon  the  return  of  the  advance  payments  as 
provided  in  this  section  to  applicants,  if  the  organization 
is  not  completed  within  one  year  shall  be  filed  with  the  In- 
surance Tommissioner,  who  may  require  such  further  in- 
fornuition  as  lie  deems  necessary,  and  if  the  purposes  of 
the  association  conform  to  the  requirements  of  this  Act  and 
all  provisions  of  the  law  have  been  complied  with,  the 
Insurance  Commissioner  shall  so  certify,  and  retain  and 
record  (or  file)  the  articles  of  incorporation,  and  furnish 
the  incorporators  a  preliminary  certificate  authorizing  said 
association  to  solicit  members  as  hereinafter  provided. 
Upon  receipt  of  said  certificate  from  the  Insurance  Com- 
missioner, said  association  may  solicit  members  for  the 
purpose  of  completing  its  organization  and  shall  collect 
from 'each  applicant  the  amount  of  not  less  than  one  regu- 
lar monthly  payment  in  accordance  with  its  table  of  rates 
as  provided  by  its  constitution  and  laws  and  shall  issue  to 
each  such  applicant  a  receipt  for  the  amount  so  collected. 
But  no  such  association  shall  incur  any  liability  other  than 
for  such  advanced  payments,  nor  issue  any  benefit  certifi- 
cate, nor  pay  or  allow,  or  offer  or  promise  to  pay  or  allow 
to  any  person  any  death  or  disability  benefit  until  actual 
bona  fide  applications  for  death  benefit  certificates  have 
been  secured  upon  at  least  five  hundred  lives  for  at  least 
one  thousand  dollars  each,  and  all  such  applicants  for 
death  benefits  shall  have  been  regularly  examined  by  legal- 
ly qualified  practicing  physicians,  and  certificates  of  such 
examinations  have  been  duly  filed  and  approved  by  the 
chief  medical  examiner  of  such  association  nor  until  there 


160 


shall  be  established  ten  subordinate  lodges  or  branches 
into  which  said  five  hundred  applicants  have  been  iaitiat- 
ed,  nor  until  there  has  been  submitted  to  the  Insurance 
Couiniissioner,  under  oath  of  the  president  and  secretary 
or  corresponding  officers  of  such  association,  a  list  of  such 
applicants,  giving  their  names,  addresses,  date  examined, 
date  approved,  date  initiated,  name  and  number  of  subor- 
dinate branch  of  which  each  applicant  is  a  meiuber, 
amount  of  benefits  to  be  granted,  rate  o>.  staled  periodical 
contributions  which  shall  be  sufficient  to  provide  for  meet- 
ing the  mortuary  obligation,  contracted,  when  value,  for 
death  benefits,  upon  the  basis  of  the  iVational  Fraternal 
T'ongress  Table  of  Mortality,  as  adopted  by  the  National 
Fraternal  Congress  August  23,  1899,  or  any  higher  stand- 
ard at  the  option  of  the  association  and  for  disability  bene- 
fits by  tables  based  upon  reliable  experience  and  for  com- 
bined death  and  permanent  total  disability  benefits  by 
tables  based  upon  reliable  experience,  with  an  interest  as- 
sumption not  higher  than  four  per  cent,  per  annum,  nor 
until  it  shall  be  shown  to  the  Insurance  Commissioner  by 
the  sworn  statement  of  the  treasurer  or  corresponding  of- 
ficer of  such  association  that  at  least  five  hundred  appli- 
cants have  each  paid  in  cash  at  least  one  regular  monthly 
payment  as  herein  provided  per  one  thousand  dollars  of 
indemnity  to  be  effected,  which  payments  in  the  aggTegate 
shall  amount  to  at  least  twenty-five  hundred  dollars,  all  of 
which  shall  be  credited  to  the  mortuary  or  disability  fund 
on  account  of  such  applicants,  and  no  part  of  which  may 
be  used  for  expenses. 

Said  advanced  payments  shall,  during  the  period  of  or- 
ganization, be  held,  in  trust  and,  if  the  organization  is  not 
complete  witliin  one  year,  as  hereinafter  provided,  return- 
ed to  said  applicants.  The  Insurance  Commissioner  may 
make  such  examination  and  require  such  further  informa- 
tion as  he  deems  ad-sisable,  and  upon  presentation  of  satis- 
factory evidence  that  the  association  has  complied  with  all 
provisions  of  law  he  shall  issue  to  such  association  a  cer- 
tificate to  that  effect.    Such  certificate  shall  be  prima  facie 


161 

evidence  of  the  existence  of  such  association  at  the  date  of 
such  certificate.  The  Insurance  Commissioner  shall  cause 
a  record  of  such  certificate  to  be  made  and  a  certified  copy 
of  such  record  may  be  given  in  evidence  with  like  effect  as 
the  original  certificate.  No  preliminary  certificate  gTanted 
under  the  provisions  of  this  section  shall  be  valid  after  one 
year  from  this  date,  or  after  such  further  period,  not  exceed- 
ing one  year,  as  may  be  authorized  by  the  Insurance  Com- 
missioner upon  cause  shown,  unless  the  five  hundred  ap- 
plicants herein  required  have  been  secured  and  the  organi- 
zation has  been  completed  as  herein  provided,  and  the  arti- 
cles of  incorporation  and  al-l  proceedings  thereunder  shall 
become  null  and  void  in  one  year  from  the  date  of  said 
preliminary  certificate,  or  at  the  expiration  of  said  extend- 
ed period,  unless  such  association  shall  have  completed  its 
organization  and  commenced  business  as  herein  provided. 
When  any  domestic  association  shall  have  discontinued 
business  for  the  period  of  one  year,  or  has  less  than  four 
hundred  members  its  charter  shall  become  null  and  void. 

Every  such  association  shall  have  the  power  to  make  a 
constitution  and  by-laws  for  the  government  of  the  asso- 
ciation, the  admission  of  its  members,  the  management  of 
its  affairs,  and  the  fixing  and  readjusting  of  the  rates  of 
contribution  of  its  members  from  time  to  time;  and  it  shall 
have  the  power  to  change,  alter,  add  to  or  amend  such  con- 
stitution and  by-laws,  and  shall  have  such  other  powers  as 
are  necessary  and  incidental  to  carrying  into  effect  the 
objects  and  purposes  of  the  association. 

Sec  156.  Existing  Corporation^  Reincorporation.  Any 
association  uoav  engaged  in  transacting  business  in  this 
State  may  exercise,  after  the  passage  of  this  Act,  all  of  the 
rights  conferred  thereby,  and  all  of  the  rights,  powers  and 
privileges  now  exercised  or  possessed  by  it  under  its 
charter  or  articles  of  incorporation  not  inconsistent  with 
this  Act,  if  incor^Dorated ;  or,  if  it  be  a  voluntary  associa- 
tion, it  may  incorporate  hereunder.  But  no  association 
already  organized  shall  be  required  to  reincorporate  there- 
under, and  any  such  association  may  amend  its  articles 


162 

of  iiicorporatioii  from  time  to  time  in  tlie  mauuer  provided 
tliereiu,  or  iu  its  coDstitution  and  laws,  and  all  such  amend- 
ments shall  be  tiled  with  the  Insurance  Commissioner  and 
shall  become  operative  upon  such  filing  unless  a  later  time 
be  provided  in  such  amendments  or  in  its  articles  of  in- 
corporation, constitution  or  laws. 

Sec.  157.  Mergers  and  Transfers.  No  domestic  asso- 
ciation shall  merge  with  or  accept  the  transfer  of  the 
membership  or  funds  of  any  other  association  unless  such 
merger  or  transfer  is  evidenced  by  a  contract  in  Avriting, 
setting  out  in  full  the  terms  and  conditions  of  such  merger 
or  transfer  and  filed  with  the  Insurance  Commissioner  of 
this  State,  together  with  a  sworn  statement  of  the  j&nanciaJ 
condition  of  each  of  said  associations  by  its  president 
and  secretarj^,  or  corresponding  officers,  and  a  certificate 
of  sucli  officers,  duly  verified  under  oath  of  said  officers 
of  each  of  tiie  contracting  associations,  that  such  merger 
or  transfer  has  been  approved  by  a  vote  of  two-thirds  of 
the  members  of  the  supreme  legislative  or  governing  body 
of  each  of  said  associations. 

Upon  the  submission  of  said  contract,  financial  state- 
ments and  certificates,  tlie  Insurance  Commissioner  shall 
examine  the  same,  and  if  he  shall  find  such  financial  state- 
ments to  be  correct  and  the  said  contract  to  be  in  conform- 
ity with  tlie  provisions  of  this  section,  and  that  such  merger 
or  transfer  is  just  and  equitable  to  the  members  of  eacli 
of  said  associations,  he  shall  approve  said  merger  or  trans- 
fer, issue  his  certificate  to  that  effect,  and  thereupon  the 
said  contract  or  merger  or  transfer  shall  be  in  full  force 
and  effect. 

In  case  such  contract  is  not  approved,  the  fact  of  its  sub- 
mission and  its  contents  shall  not  be  disclosed  by  the  Insur- 
ance Commissioner. 

Skc.  158.  Annual  License.  Associations  which  are  now 
autliorized  to  transact  business  in  this  State  may  continue 
such  business  until  the  first  day  of  January  next  succeed- 
ing the  passage  of  this  Act,  and  the  authority  of  such 


163 

association  may  thereafter  be  renewed  annually,  but  in  all 
cases  to  terminate  on  the  first  day  of  the  succeeding  Jan- 
uary ;  provided,  however,  that  license  shall  continue  in  full 
force  and  eft'ect  until  the  new  license  be  issued  or  speciflcaf- 
ly  refused.  For  each  .such  license  or  renewal  the  associa- 
tion shall  pay  the  Insurance  Commissioner  twenty-five 
dollars.  A  duly  certified  copy  or  duplicate  of  such  license 
shall  be  prima  facie  evidence  that  the  licensee  is  a  frater- 
nal beneficiary  association  within  the  meaning  of  this  Act. 

Sec.  159.  Admission  of  Foreign  Associations.  No  for- 
eign association  now  transacting  business  organized  prior 
to  the  passage  of  tliis  Act  which  is  not  now  authorized  to 
transact  business  in  this  State  shall  transact  any  business 
herein  without  a  license  from  the  Insurance  Commissioner. 
Any  such  association  shall  be  entitled  to  a  license  to  trans- 
act business  within  this  State  upon  filing  with  the  Com- 
missioner a  dul^'  certified  copy  of  its  charter  or  articles  of 
association ;  a  cop^-  of  its  constitution  and  laws  certified 
by  its  secretary  or  corresponding  officers;  a  power  of  at- 
torney to  the  Commissioner  as  hereinafter  provided;  a 
statement  of  its  business  under  oath  of  its  president  and 
secretary,  or  corresponding  officers  in  the  form  required 
by  the  Commissioner,  duly  verified  by  an  examination 
made  by  the  supervising  insurance  official  of  its  home 
State  or  other  State  satisfactory  to  the  Insurance  Com- 
missioner of  this  State;  a  certificate  from  the  proper  of- 
ficial in  its  home  State,  proA'ince  or  country  that  the 
association  is  legally  organized;  a  copy  of  tlie  contract, 
which  must  show  that  benefits  are  provided  for  by  period- 
ical or  other  payments  by  person  holdng  similar  con- 
tracts; and  upon  furnisliing  the  Commissioner  such  other 
information  as  he  may  deem  necessary  to  a  proper  exhibit 
of  its  business  and  plan  of  working,  and  upon  showing 
that  its  assets  are  invested  in  accordance  with  tlie  laws  of 
the.  State,  territory,  district,  province  or  country  Avhere 
it  is  organized,  he  shall  issue  a  license  to  such  association 
to  do  business  in  this  State  until  the  first  day  of  the  suc- 
ceeding January,  and  sucli  license  shall,  upon  compliance 


164 

with  the  provisions  of  this  Act,  be  renewed  annually,  but 
in  all  cases  to  terminate  on  the  first  day  of  the  succeeding 
January;  provided,  howeA^er,  that  license  shall  continue 
in  full  force  and  effect  until  the  new  license  be  issued  or 
specifically  refused.  Any  foreign  association  desiring  ad- 
mission to  this  State  shall  have  the  qualifications  required 
of  domestic  associations  organized  under  this  Act,  and 
have  its  assets  invested  as  required  by  the  laws  of  the 
State,  territory,  district,  country  or  province  where  it  is 
organized.  For  each  such  license  or  renewal  the  associa- 
tion shall  pay  the  Commissioner  twenty-five  dollars.  When 
the  Commissioner  refuses  to  license  any  association  or 
revokes  its  authority  to  do  business  in  this  State  he  shall 
reduce  his  ruling,  order  or  decision  to  writing  and  file 
the  same  in  his  office,  and  shall  furnish  a  copy  thereof, 
together  with  a  statement  of  his  reasons,  to  the  officers  of 
the  association  upon  request,  and  the  action  of  the  Com- 
missioner shall  be  reviewable  by  proper  proceedings  in 
any  court  of  competent  jurisdiction  within  the  State;  pro- 
vided, however,  that  nothing  contained  in  this  or  the  pre- 
ceding section  shall  be  taken  or  construed  as  preventing 
any  such  association  from  continuing  in  good  faith  all  con- 
tracts made  in  this  State  during  the  time  such  association 
was  legally  authorized  to  transact  business  herein. 

Sec.  160.  Service  of  Process.  Every  association 
whether  domestic  or  foreign,  now  transacting  business  in 
this  State  shall,  within  thirty  days  after  passage  of  this 
Act,  and  every  such  association  hereafter  applying  for  ad- 
mission, shall,  before  being  licensed,  appoint  in  writing 
the  Insurance  Commissioner  and  his  successor  in  office  to 
be  its  true  and  lawful  attorney,  ujdou  whom  all  legal  pro- 
cess in  any  action  or  proceeding  against  it  shall  be  served 
and  in  such  writing  shall  agree  that  any  lawful  process 
against  it  which  is  served  upon  such  attorney  shall  be  of 
the  same  legal  force  and  validity  as  if  served  upon  the 
association,  and  that  the  authority  shall  continue  in  force 
so  long  as  any  liability  remains  outstanding  in  this  State. 


165 

Copies  of  such  appointment,  certified  by  said  Insurance 
Commissioner,  shall  be  deemed  sufficient  evidence  thereof 
and  shall  be  admitted  in  evidence  with  the  same  force  and 
effect  as  the  original  thereof  might  be  admitted.  Service 
shall  only  be  made  upon  such  attorney,  must  be  made  in 
duplicate  with  the  Insurance  Commissioner,  or,  in  his 
absence  upon  the  person  in  charge  of  his  office,  and  shall 
be  deemed  sufficient  service  upon  such  association ;  pro- 
vided, however,  tlmt  no  such  service  shall  be  valid  or  bind- 
ing against  any  such  association  when  it  is  required  there- 
under to  file  its  answer,  pleading  or  defense  in  less  than 
thirty  days  from  the  date  of  mailing  the  copy  of  such 
service  to  association.  When  legal  process  against  any 
such  association  is  served  upon  said  Insurance  Commis- 
sioner he  shall  forthwith  forward  by  registered  mail  one  of 
the  duplicate  copies,  prepaid  and  directed  to  its  secretary 
or  corresponding  officer.  Legal  process  shall  not  be  served 
upon  any  such  association  except  in  the  manner  provided 
herein. 

Sec.  161.  Place  of  Meeting.  Any  domestic  associa- 
tion may  provide  that  the  meetings  of  its  legislative  or 
governing  body  may  be  held  in  any  State,  district,  province 
or  territor}^  wherein  such  association  has  subordinate 
branches,  and  all  business  transacted  at  such  meetings 
shall  be  as  valid  in  all  respects  as  if  such  meetings  were 
held  in  this  State.  But  its  principal  office  shall  be  located 
in  this  State. 

Sec.  162.  LiahiUty  of  Officers  and  Members.  Officers 
and  members  of  the  supreme,  grand  or  any  subordinate 
body  of  any  such  incorporated  association  shall  not  be 
individually  liable  for  the  payment  of  any  disability  or 
death  benefit  provided  for  in  the  laws  and  agreements  of 
such  association,  but  the  same  shall  be  payable  only  out  of 
the  funds  of  such  association  and  in  the  manner  provided 
by  its  laAvs. 

Sec.  163.  Limitation  Upon  Power  to  Waive  Provisions 
of  Association's  Laics.  The  constitution  and  laws  of  the 
association  may  provide  that  no  subordinate  body  nor  any 


166 

of  its  subordinate  officers  or  members  shall  have  the  power 
or  authority  to  waive  any  of  tlie  provisions  of  the  laws 
and  constitution  of  the  association,  and  the  same  shall  be 
binding  on  the  association  and  each  and  every  member 
thereof,  and  on  all  beneficiaries  of  members. 

Sec.  164.  Benefits  Exempt  from  Execution,  ^o  money 
or  other  benefit,  charity  or  relief  or  aid  to  be  paid,  pro- 
vided or  rendered  hj  any  such  association  shall  be  liable  to 
attachment,  garnishment  or  other  process  or  be  seized, 
taken  appropriated  or  applied  by  any  legal  or  equitable 
process  or  operation  of  law  to  pay  any  debt  or  liability'  of  a 
member  or  beneficiary  or  any  other  person  who  may  have 
a  right  thereunder,  either  before  or  after  payment. 

Sec.  165.  Amendments  to  Goiistitution  and  Laws. 
Every  association  transacting  business  under  this  Act  shall 
file  with  tlie  Insurance  Commissioner  a  duly  certified  copy 
of  all  amendments  of  or  additions  to  its  constitution  and 
laws  witliin  ninet}-  days  after  the  enactment  of  the  same. 
Printed  copies  of  the  constitution  and  laws  as  amended, 
changed  or  added  to,  certified  by  the  secretary  or  corres- 
ponding officer  of  the  association,  shall  be  prima  facie 
evidence  of  the  legal  adoption  thereof. 

Sec.  166.  Annual  Reports.  Every  association  trans- 
acting business  in  this  State  shall  annually,  on  or  before 
the  first  day  of  IMarch,  file  with  the  Insurance  Commis- 
sioner in  sucli  form  as  he  may  re(iuire  a  statement  under 
oatli  of  its  president  and  secretary  or  corresponding  offi- 
cers, of  its  condition  and  standing  on  the  thirty-first  day 
of  December  next  preceding,  and  of  its  transactions  for 
the  year  ending  on  that  date,  and  also  shall  furnish  such 
other  information  as  tbe  Commissioner  may  deem  neces- 
sary to  a  proper  exhibit  of  its  business  and  plan  of  work- 
ing. The  Commissioner  may  at  otlier  times  require  any 
further  statement  he  may  deem  necessary  to  be  made  re- 
lating to  such  association. 


167 


8e(\  IGT.  YaJudtlon  of  Certipcatci^.  Iii  addition  to 
the  anmial  report  herein  recjuired,  each  association  sliall 
annually  report  to  the  Commissioner  a  valuation  of  its 
certificates  in  force  on  December  31st  last  precedini>-,  ex- 
cluding those  issued  within  the  year  for  whicli  the  report 
is  filed  in  cases  where  the  contributions  for  the  first  year 
in  whole  or  in  part  are  used  for  current  mortality  and  ex- 
penses. Such  rei)ort  of  valuation  shall  show,  as  contin- 
gent liabilities,  the  present  mid-year  value  of  the  promised 
benefits  provided  in  the  constitution  and  laws  of  such 
association  under  certificates  then  subject  to  valuation ; 
and,  as  contingent  assets,  the  present  mid-year  value  of 
the  future  net  contributions  provided  in  the  constitution 
and  laws  as  the  same  are  in  practice  actually  collected. 
At  tlie  option  of  any  association,  in  lieu  of  the  aboAe,  tlie 
valuation  may  show  the  net  value  of  the  certificates  sub- 
ject to  valuation  hereinbefore  provided,  and  said  net  value, 
when  computed  in  case  of  monthly  contributions,  ma}'  be 
the  means  of  the  terminal  values  for  the  end  of  the  preced- 
ing and  of  the  current  insurance  years. 

Sec,  168.  Stanckird  of  Yaluat'ion.  Such  valuation  shall 
be  certified  by  a  competent  accountant  or  actuary;  or,  at 
the  request  and  expense  of  tlie  association,  verified  by  the 
actuary  of  the  Department  of  Insurance  of  the  home  State 
of  the  association,  and  shall  be  filed  with  the  Commissioner 
within  ninety  days  after  tlie  submission  of  the  last  preced- 
ing annual  report.  The  legal  minimum  standard  of  valua- 
tion for  all  certificates,  except  for  disability  benefits,  shall 
be  the  National  Fraternal  Congress  Table  of  Mortality  as 
adopted  by  the  National  Fraternal  Congress,  August  28, 
1899,  or,  at  the  option  of  the  association,  any  liiglier  table; 
or,  at  its  option,  it  may  use  a  table  based  upon  the  associa- 
tion's own  experience  of  at  least  twenty  years  and  cover- 
ing not  less  than  one  hundred  thousand  lives,  with  interest 
assumption  not  more  than  four  per  centum  per  annum. 
Each  such  valuation  report  sliall  set  forth  clearly  and  fully 
the  mortality  and  interest  basis  and  the  method  of  valua- 
tion.    Any  association    providing  for   disability   benefits 


! 

168  j 

shall  keep  the  net  contribution  for  such  benefits  in  a  fund 
separate  and  apart  from  all  other  benefit  and  expense 
funds  and  the  valuation  of  all  other  business  of  the  associa- 
tion ;  provided  that  where  a  combined  contribution  table  is 
used  by  an  association  for  both  death  and  permanent  total 
disability  benefits,  the  valuation  shall  be  according  to 
tables  of  reliable  experience,  and  in  such  case  a  sej)aration 
of  the  funds  shall  not  be  required. 

The  valuation  herein  provided  for  shall  not  be  consid- 
ered or  regarded  as  a  test  of  the  financial  solvency  of  the 
association,  but  each  association  shall  be  held  to  be  legally 
solvent  so  long  as  the  funds  in  its  possesion  are  equal  to 
or  in  excess  of  its  matured  liabilities. 

Sec.  169.  Report  of  Valuation.  Beginning  Avith  the 
year  1917  a  report  of  such  valuation  and  an  explanation 
of  the  facts  concerning  the  condition  of  the  association 
thereby  disclosed  shall  be  printed  and  mailed  to  each  bene- 
ficiary member  of  the  association  not  later  than  June  Ist 
of  each  year;  or,  in  lieu  thereof,  such  report  of  valuation 
and  showing  of  the  association's  condition  as  hereby  dis- 
closed may  be  published  in  the  association's  official  pa- 
per, and  the  issue  containing  the  same  mailed  to  each  bene- 
ficiary member  of  the  association.  The  laws  of  such  asso- 
ciation shall  provide  that  if  the  stated  periodical  contribu- 
tions of  the  members  are  sufficient  to  pay  all  matured 
death  and  disability  claims  in  full  and  to  provide  for  the  y 
creation  and  maintenance  of  tlie  funds  required  by  its  ^ 
laws,  additional,  increased  or  extra  rates  of  contribution 
shall  be  collected  from  the  members  to  meet  such  defici- 
ency; and  such  laws  may  provide  that,  upon  the  written 
application  or  consent  of  the  member,  his  certificate  may 
be  charged  w^ith  his  proportion  of  any  deficiency  disclosed 
by  A'aluation,  with  interest  not  exceeding  five  per  centum 
per  annum. 

Sec.  170.  Provisions  to  Insure  Future  Security.  If 
the  valuation  of  the  certificates,  as  hereinbefore  provided, 
on  December  31,  1920,  shall  show  that  the  present  value 
of  future  net  contributions,  together  with   the  admitted 


169 

assets,  is  less  than  ninety  per  cent,  of  the  present  value 
of  the  promised,  benefits  and  accrued  liabilities,  such  asso- 
ciation shall  be  required  thereafter  to  reduce  such  defi- 
ciency not  less  than  five  per  centum  of  the  total  deficiency 
on  said  December  31,  1920,  at  each  succeeding  triennial 
valuation.  If  at  any  succeeding  triennial  valuation  such 
association  does  not  show  such  percentage  of  improve- 
ment, the  Commissioner  shall  direct  that  it  thereafter 
comply  with  the  requirements  herein  specified.  If  the  next 
succeeding  triennial  valuation  after  the  receipt  of  such 
notice  shall  show  that  the  association  has  not  made  the 
percentage  of  improvement  required  herein,  tlie  Commis- 
sioner may,  in  the  absence  of  good  cause  show  for  such 
failure,  institute  proceedings  for  tlie  dissolution  of  such 
association  in  accordance  with  the  provisions  of  Section 
172  of  this  Article,  or,  in  the  case  of  a  foreign  association, 
its  license  may  be  cancelled  in  the  manner  provided  in  this 
Article.' 

Sec.  171.  \Deficienci/  Shoicn  hij  Triennial  Valuation. 
Any  such  association,  shown  by  any  triennial  valuation, 
subsequent  to  December  31,  1020,  not  to  have  made  the 
improvements  herein  required  shall,  within  one  year  there- 
after complete  such  deficient  improvements,  or  thereafter, 
as  to  all  new  members  admitted,  be  subject,  so  far  as 
stated  rates  of  contribution  are  concerned,  to  the  provi- 
sions of  Section  155  of  this  Article,  applicable  in  the  organ- 
ization of  new  associations;  provided  that  the  contribu- 
tions and  funds  of  such  new  members  shall  be  kept  sepa- 
rated and  apart  from  the  other  funds  of  the  association  un- 
til the  required  improvement  shall  be  shown  by  valuation. 
If  such  required  improvement  is  not  shown  by  the  succeed- 
ing triennial  valuation,  then  the  said  new  members  may 
be  placed  in  a  separate  class  and  their  certificates  valued 
as  an  independent  association  in  respect  of  contribution 
and  funds. 

Sec.  172.  Examination  of  Domestic  Associations.  The 
Insurance  Commissioner,  or  any  person  he  may  appoint, 
shall  have  the  power  of  visitation  and  examination  into  the 


170 


affairs  of  any  domestic  association.  He  may  employ  as- 
sistants for  the  purpose  of  such  examination,  and  he,  or 
any  person  lie  may  appoint,  sliall  have  free  access  to  all  the 
books,  papers  and  documents  that  relate  to  the  business  oC 
the  association,  and  may  summon  and  qualify  as  witnesses 
under  oath  and  examine  its  officers,  agents  and  employees 
or  other  person  in  relation  to  the  affairs,  transactions  and 
conditions  of  the  association. 

The  expense  of  such  examination  shall  be  paid  by  the 
association  examined,  upon  statement  furnished  by  the  In- 
surance Commissioner,  and  the  examination  shall  be  made 
at  least  once  in  three  3^ears.  Whenever  after  examination 
the  Insurance  Commissioner  is  satified  that  any  domestic 
association  has  failed  to  comply  with  any  provisions  of 
this  Act,  or  is  exceeding  its  powers,  or  is  not  carrying  out 
its  contracts  in  good  faith,  or  is  transacting  business 
fraudulently,  or  wherever  any  domestic  association  after 
the  existence  of  one  year  or  more  shall  have  a  membership 
of  less  than  400  (or  shall  determine  to  discontinue  busi- 
ness), the  Insurance  Commissioner  may  present  the  facts 
relating  thereto  to  the  Attorney-General  who  shall,  if  he 
deem  the  circumstances  warrant,  commence  an  action  in 
quo  warranto  in  a  court  of  competent  jurisdiction,  and 
such  court  shall  thereupon  notify  the  officers  of  such  asso- 
ciation of  a  liearing;  and  if  it  shall  then  appear  that  sucli 
association  should  be  closed,  said  association  shall  be  en- 
joined from  carrying  on  any  further  business;  and  some 
person  sliall  be  appointed  receiver  of  such  association  and 
shall  proceed  at  once  to  take  possession  of  the  books, 
papers,  monies  and  other  assets  of  the  association,  and 
shall  forthwith,  under  the  direction  of  the  court,  proceed 
to  close  the  affairs  of  the  association  and  to  distribute  its 
funds  to  tliose  entitled  thereto.  No  such  proceedings  shall 
be  commenced  by  tlie  Attorney-General  against  any  such 
association  until  after  notice  has  been  duly  served  on  the 
chief  executive  officer  of  the  association  and  a  reasonable 
opportunity  given  to  it,  on  a  date  to  be  named  in  said 
notice,  to  show  cause  why  such  proceedings  should  not  be 
commenced. 


171 


Sec.  173.  Application  for  Receiver.  No  application 
for  injunction  against  or  proceedings  for  any  dissolution 
of  or  the  appointment  of  a  receiver  for  anj^  such  domestic 
association  or  branch  thereof  shall  be  entertained  by  any 
court  in  this  State  unless  the  same' is  made  by  the  Attor- 
ney-General. 

Sec.  174.  E.imniiKition  of  Foreign  Associations.  The 
Insurance  Commissioner,  or  any  person  whom  he  may  ap- 
point, may  examine  any  foreign  association  transacting 
or  applying  for  admission  to  transact  business  in  this  State. 
The  said  Commissioner  may  employ  assistants,  and  he,  or 
any  person  he  may  appoint,  shall  have  free  access  to  all  the 
books,  papers  and  documents  that  relate  to  the  business 
of  the  association,  and  may  summon  and  qualify  as  wit- 
nesses under  oath  and  examine  its  officers,  agents  and  em- 
ployees and  otlier  persons  in  relation  to  the  atfairs,  trans- 
actions And  ccmditions  of  the  association.  He  may,  in  his 
discretion,  accept  in  lieu  of  such  examination  the  exami- 
Tiation  of  the  Insurance  Department  of  the  State,  terri- 
tory, district,  jDrovince  or  country  where  such  association 
is  organized.  'The  actual  expenses  of  examiners  making 
any  such  examination  shall  be  paid  by  the  association  upon 
statement  furnished  by  the  Insurance  Commissioner.  If 
any  such  association  or  its  officers  refuse  to  submit  to 
such  examination  or  to  comply  with  tlie  provisions  of  this 
section  relative  thereto,  the  autliority  of  such  association 
to  Avrite  new  business  in  this  State  shall  be  suspended  or 
license  refused  until  satisfactory  evidence  is  furnished  the 
Commissioner  relating  to  the  condition  and  affairs  of  the 
association,  and  during  such  suspension  the  association 
shall  not  write  new  business  in  this  State. 

Sec.  175.  Adverse  Puhlications.  Pending,  during  or 
after  an  examination  or  investigation  of  any  such  associa- 
tion, either  domestic  or  foreign,  the  Insurance  Commis- 
sioner shall  make  public  no  financial  statement,  report  or 
finding,  nor  shall  he  permit  to  become  public  any  financial 
statement,  report  or  finding  affecting  the  status,  standing 
or  rights  of  any  such  association  until  a  copy  thereof  shall 


172 

have  been  served  upon  such  association  at  its  home  office, 
nor  until  such  association  shall  have  been  afforded  a  rea- 
sonable opportunity  to  answer  any  such  financial  state- 
ment, report  or  finding  and  to  make  such  showing  in  con- 
nection therewith  as  it  may  desire. 

Sec.  17G.  Revocation  of  License.  When  the  Insur- 
ance Commissioner,  on  investigation,  is  satisfied  that  any 
foreign  association  transacting  business  under  this  Act 
has  exceeded  its  powers,  or  has  failed  to  comply  with  any 
provisions  of  this  Act,  or  is  conducting  business  fraudu- 
lently, or  is  not  carrying  out  its  contracts  in  good  faith, 
he  shall  notify  the  association  of  his  findings  and  state  in 
writing  the  grounds  of  his  dissatisfaction,  and  after  rea- 
sonable notice  require  said  associaton  on  a  date  named 
to  show  cause  why  its  license  should  not  be  revoked.  If 
on  the  date  named  in  said  notice  such  objections  have  not 
been  removed  to  the  satisfaction  of  tlie  said  Commission ei', 
or  the  association  does  not  present  good  and  sufficient 
reasons  why  its  authority  to  transact  business  in  this  State 
should  not  at  that  time  be  revoked,  he  may  revoke  the  au-l 
thority  of  the  association  to  continue  business  in  this  State. 
All  decisions  and  findings  of  the  Commissioner  made  under 
the  provisions  of  this  section  may  be  reviewed  by  proper 
proceedings  in  any  court  of  competent  jurisdiction,  as  pro- 
vided in  Section  159. 

Sec.  177.  Exemptions.  Nothing  contained  in  this  Act 
shall  be  construed  to  effect  or  apply  to  grand  or  subordi- 
nate lodges  of  Masons,  Odd  Fellows  or  Knights  of  Pythias 
(exclusive  of  the  insurance  .department  of  the  Supreme 
Lodge,  Knights  of  Pythias),  and  the  Junior  Order  of 
United  American  Mechanics  (exclusive  of  the  beneficiary 
degree  or  insurance  branch  of  the  National  Council  Jun- 
ior Order  United  American  Mechanics)  or  associations 
which  limit  their  membership  to  any  one  hazardous  occu- 
pation, or  to  similar  associations  which  do  not  issue  in- 
surance certificates,  or  to  any  association  of  local  lodges  of 
a  society  now  doing  business  in  this  State  which  provides 
death  benefits  not  exceeding  three  hundred  dollars  to  any 


173 


one  persoD,  or  disability  benefits  not  exceeding  tliree  liiin- 
dred  dollars  in  any  one  year  to  any  one  person,  or  both, 
or  to  any  contract  or  reinsurance  business  on  such  plans 
in  this  &tate,  or  to  domestic  associations  which  limit  their 
membership  to  emploj^es  of  any  particular  city  or  town, 
designated  firm,  business  house  or  corporation,  or  to 
domestic  lodges,  orders  or  associations  of  a  purely  reli- 
gious, cLaritable  and  benevolent  description,  which  do  not 
provide  for  a  death  benefit  of  more  than  one  hundred  dol- 
lars, OT  for  disability  benefits  of  more  than  one  hundred 
and  fifty  dollars  to  any  one  person  in  any  one  year,  or  to 
corporations,  societies  or  voluntarj^  associations,  the  busi- 
ness of  which  is  conducted  strictly  upon  the  mortuary 
assessment  plan  and  of  which  the  death  benefit  certifi- 
cates are  issued  for  no  fixed  amount  and  are  limited  to 
a  *um  not  exceeding  five  hundred  dollars  in  the  case  of 
aiy  one  person ;  provided,  always  that  any  such  domestic 
crder  or  society  which  has  more  than  five  hundred  mem- 
jers,  and  provides  for  death  or  disability  benefits,  any 
and  any  such  domestic  lodge,  order  or  society,  which 
issues  to  any  person  a  certificate  providing  for  the  pay- 
ment of  benefits,  shall  not  be  exempt  by  the  provisions  of 
this  section,  but  shall  comply  with  all  the  requirements 
of  this  Act. 

The  Insurance  Commissioner  may  require  from  any  so- 
ciety such  information  as  will  enable  him  to  determine 
whether  such  society  is  exempt  from  the  provisions  of 
this  Act.  No  society  which  is  exempt  by  the  provisions 
of  this  section  from  the  requirement  of  this  Act  shall  give 
or  allow  or  promise  to  give  or  allow,  to  any  person  any 
compensation  for  procuring  new  members.  Any  frater- 
nal beneficiary  association  heretofore  organized  and  in- 
corporated and  operating  within  the  definition  set  forth 
in  Sections  143,  144  and  145,  providing  for  benefits  in 
case  of  death  or  disability,  resulting  solely  from  acci- 
dents, but  which  does  not  obligate  itself  to  pay  death  or 
sick  benefits,  may  be  licensed  under  the  provisions  of  this 
Act,  and  shall  have  all  the  privileges  and  shall  be  subject 


174 

to  all  the  provisions  and  regulations  of  this  Act,  except 
that  the  provisions  of  this  Act  requiring  medical  exami- 
nations, valuations  of  benefit  certificates,  and  that  the 
certificates  sliall  specify  the  amount  of  benefits,  shall  not 
apply  to  such  associations.  , 

Sec.  178.  E.rempfious  fron  Taxation.  Every  Jraternal 
beneficiary  association  organized  or  licensed  unfler  this 
Act  is  hereby  declared  to  be  a  charitable  and  benevolent 
institution,  and  all  of  its  funds  shall  be  exempt  from  all 
and  every  State,  county,  district,  municipal  andWhool 
tax,  other  than  taxes  on  real  estate  and  office  equimnent. 

Sec.   179.     PenaJflcs.     Any  person,  officer,  mexnbVr  or 
examining  physician  of  any  association  authorized  t\  ^o 
business  under  this  Act  who  shall  knowingly  or  wilfully 
make  any  false  or  fraudulent  statement  or  representatipn 
in  or  with  reference  to  any  application  for  membership), 
or  for  the  purpose  of  obtaining  money  from  or  benefit  v\ 
any  association  transacting  business  under  this  Act,  shall 
be  guilty  of  a  misdemeanor,  and  upon  conviction  thereof 
shall  be  punislied  by  a  fine  of  not  less  than  one  hundred! 
dollars  nor  more  than  five  hundred  dollars,  or  imprison- 
ment in  the  county  jail  for  not  less  than  thirty  days  nor  , 
more  than   one  year,   or   both,   in   the  discretion   of   the 
court,  and  any  person   who  shall  wilfully  make  a  false 
statement  of  any  material  fact  or  thing  in  a  sworn  state- 
ment as  to  the  death  or  disability  of  a  certificate  holder 
in  any  such  association  for  the  purpose  of  procuring  pay- 
ment of  a  benefit  named  in  the  certificate  of  such  holder, 
and  any  person  who  shall  wilfully  make  a  false  statement 
in  any  verified  report  or  declaration  made  under  oath  re- 
quired or  authorized  by  this  Act,  shall  be  guilty  of  per-* 
jury,  and  shall  be  proceeded  against  and  punished  as  pro- 
vided by  the  statutes  of  this  State  in  relation  to  the  crime 
of  perjury.     Any  person  who  shall  solicit  membership  for, 
or  in  any  manner  assist  in  procuring  membership  in  any 
fraternal  beneficiary  association  not  licensed  to  do  busi- 
ness in  this  v'^tate,  or  who  shall  solicit  membership  for, 
or  in  any  manner  assist  in  procuring  membership  in  any 


175 

such  association  not  authorized  as  herein  provided  to  do 
business  as  herein  defined  in  tliis  State,  shall  be  guiltj 
of  a  misdemeanor,  and  upon  conviction  thereof  shall  be 
punisled  by  a  tine  of  not  less  than  fifty  nor  more  than  two 
hundred  dollars.  Anv  association,  or  any  officer,  ai^ent,  or 
emplo.ee  thereof  neglecting  or  refusing  to  comply  with 
or  vioating.  an}'  of  the  provisions  of  this  Act,  the  penalty 
for  wlich  neglect,  refusal  or  violation  is  not  specified  in 
this  section,  shall  be  fined  not  exceeding  two  hundred  dol- 
lars ipon  conviction  thereof. 


WORKMEN'S  COMPENSATION  LAW 


OP  THE 


STATE  OF  MARYLAND 


{As  Amended  hy  the  Acts  of  the  General  Assembly) 
of  Maryland  of  11)16,  1920  and  1922) 

{Amendments  of  1920  Effective  June  1^  1920) 
{Amendments  of  1922  Effective  June  1,  1922) 


COMMISSIONERS 

ROBERT  E.  LEE,  Cliainiian 

JOSEPH  B.  HARRINGTON 

GEORGE  LOUIS  EPPLER 

A.  E.   BROWN,   Secretary 


ISSUED  BY 
STATE    INDUSTRIAL    ACCIDENT    COMMISSION 
EQUITABLE    BUILDING 
BALTIMORE 


179 


ARTICLE  CI. 
Workmen's  Compensation  Act 


CHAPTEK  800,  ACTS  OF  1914. 

AN  ACT  to  promote  the  general  welfare  of  this  state  by  providing 
compulsory  insurance  against  accident  or  death  of  workmen  engaged 
in  extra-hazardous  employments  in  this  State,  and  providing  for  the 
form,  kind  and  method  of  such  insurance  and  the  incidents  thereto; 
and  providing  for  the  amounts  of  compensation  payable  thereunder 
and  the  person  or  persons  to  whom  such  compensation  is  payable; 
and  providing  for  the  creation  of  a  State  Industrial  Acident  Com- 
mission and  defining  its  powers;  and  providing  for  the  creation  oT  a 
State  Accident  Fund;  and  providing  for  an  appropriation  to  carry 
out  the  provisions  of  this  Act;  and  providing  for  the  abolishment  in 
certain  cases  of  the  defenses  of  "Assumption  of  Risks,"  "Contribu- 
tory Negligence"  and  the  "Negligence  of  a  Fellow  Servant"  in  ac- 
tions for  personal  injury  or  death,  and  to  repeal  Chapter  837  of  the 
Acts  of  1912,  and  to  repeal  Chapter  139  of  the  Acts  of  1902,  Chapter 
153  of  the  Acts  of  1910  as  amended  by  the  Acts  of  1912,  Chapter  445, 
and  to  provide  for  the  equitable  disposition  of  the  funds  created  by 
virtue  of  the  said  Acts  of  1902,  Chapter  139,  and  the  Acts  of  1910, 
Chapter  153. 

Whereas,  the  State  of  Maryland  recognizes  that  the  prosecution  of 
various  industrial  enterprises  which  must  be  relied  upon  to  create  and 
preserve  the  wealth  and  prosperity  of  the  State  involves  injury  to  large 
numbers  of  workmen,  resulting  in  their  partial  or  total  incapacity  or 
death,  and  that  under  the  rules  of  the  common  law  and  the  provisions 
of  the  statutes  now  in  force  an  unequal  burden  is  cast  upon  its  citizens, 
and  that  in  determining  the  responsibility  of  the  employer  on  account 
of  injuries  sustained  by  his  workmen,  great  and  unnecessary  costs  is 
now  incurred  in  litigation,  which  cost  is  born  by  the  workmen,  the 
employer,  and  the  taxpayers,  in  part,  in  the  maintenance  of  courts 
and  juries  to  determine  the  question  of  responsibility  under  the  law 
as  it  now  exists;  and 

fThe  references  under  this  Article  to  S.  I.  A.  C.  are  to  the  opinions 
of  the  Maryland  State  Industrial  Accident  Commission  as  found  filed 
among  its  records  of  claims  or  as  published  in  the  Daily  Record  in 
Baltimore  City. 


180 


Whereas,  in  addition  thereto,  the  State  and  its  taxpayers  are  sub- 
jected to  a  lieavy  burden  in  providing"  care  and  support  for  such  in- 
jured worlimen  and  their  dependents,  which  burden  should,  in  so  far  as 
may  be  consistent  with  the  rights  and  obligations  of  the  people  of  the 
State,  be  more  fairly  distributed  as  in  this  Act  provided;  and 

Whereas,  the  common  law  system  governing  the  remedy  of  work- 
men against  employers  for  injuries  received  in  extra-hazardous  work 
is  inconsistent  with  modern  industrial  conditions;  and  injuries  in  such 
work,  formerly  occasional,  have  now  become  frequent  and  inevitable. 

Now,  therefore,  The  State  of  Maryland,  exercising  herein  its  police 
and  sovereign  power,  declares  that  all  phases  of  extra-hazardous  em- 
ployments be,  and  they  are  hereby  withdrawn  from  private  contro- 
versy, and  sure  and  certain  relief  for  workmen  injured  in  extra-haz- 
ardous employments  and  their  families  and  dependents  are  hereby 
provided  for,  regardless  of  questions  of  fault  and  to  the  exclusion  of 
every  other  remedy,  except  as  provided  in  this  Act. 

1914,  ch.  800,  sec.  1. 

1.  A  Commission  is  hereby  created  which  shall  be  known 
as  the  State  Industrial  Accident  Commission,  to  be  composed 
of  three  Commissioners.  Immediately  upon  the  taking  effect 
of  this  Act,  the  Governor  shall  appoint  such  Commissioners 
(not  more  than  two  of  whom  shall  belong  to  the  same  po- 
litical party).  One  of  them  shall  hold  office  for  the  first  two 
years,  another  for  the  first  four  years,  and  another  for  the 
first  six  years  following  the  pasage  and  approval  of  this 
Act.  Thereafter  the  term  shall  be  six  years.  Each  Commis- 
sioner shall  devote  his  entire  time  to  the  duties  of  the  office 
and  shall  not  hold  any  position  of  trust  or  engage  in  any 
occupation  or  business  interfering  or  inconsistent  with  his 
duties  as  Commissioner,  or  serve  on  or  under  any  com- 
mittee of  a  political  party.  Each  Commissioner  shall  hold 
office  until  his  successor  shall  be  appointed  and  shall  have 
qualified.  Vacancies  shall  be  filled  by  the  Governor  for  the 
unexpired  term.  A  decision  on  any  question  arising  under 
this  Act  concurred  in  by  two  of  the  Commissioners  shall  be 
the  decision  of  the  Commission.  The  Governor  may  at  any 
time  remove  any  Commissioner  from  office  for  inefficiency, 
neglect  of  duty  or  malfeasance  in  office.  Before  such  re- 
moval he  shall  give  such  Commissioner  a  copy  of  the  charges 
against  him,  and  shall  fix  a  time  when  he  can  be  heard  in 
his  own  defense,  either  in  person,  or  by  counsel,  which  shall 


181 

not  be  less  than  ten  days  thereafter,  and  such  hearing  shall 
be  open  to  the  public.  The  Governor  shall  designate  a  mem- 
ber of  said  Commission  as  Chairman  thereof.  The  principal 
office  of  the  Commission  shall  be  in  the  City  of  Baltimore, 
but  branch  offices  may  be  established  at  other  places  in  the 
State  for  the  purpose  of  administering  this  Act. 

Ibid,  sec.  2. 

2.  A  majority  of  the  Commission  shall  constitute  a 
quorum  for  the  transaction  of  business,  and  a  vacancy  shall 
not  impair  the  right  of  the  remaining  members  to  exercise 
all  the  powers  of  the  full  Commission,  so  long  as  a  majority 
remain.  Any  investigation,  inquiry  or  hearing  which  the 
Commission  is  authorized  to  hold,  or  undertake,  may  be  held 
or  undertaken  by  or  before  any  one  member  of  the  Commis- 
sion, and  every  order  made  by  a  member  thereof,  when  ap- 
proved and  confirmed  by  a  majority  of  the  members  and  so 
shown  on  its  record  of  proceedings,  shall  be  deemed  to  be 
the  order  of  the  Commission. 

Ibid,  sec.  3. 

3.  The  salary  of  each  of  the  Commissioners  shall  be  three 
thousand  dollars  ($3,000.00)  per  annum  and  shall  be  paid 
out  of  the  State  Treasury,  and  in  addition  to  the  said  sum  of 
$3,000  per  annum,  each  of  said  Commissioners  shall  also  re- 
ceive the  sum  of  $2,000  per  annum,  which  shall  be  paid  out 
of  its  funds  by  the  Mayor  and  City  Council  of  Baltimore  to 
each  of  said  Commissioners  as  employees  of  said  municipal 
Corporation.  In  addition  to  the  salary  provided  in  this  sec- 
tion, each  Commissioner  shall  be  allowed  his  actual  and 
necessary  traveling  and  incidental  expenses.* 

Ibid,  sec.  4. 

4.  The  Commission  shall  be  in  continuous  session  and 
open  for  the  transaction  of  business  during  all  business 
hours  of  each  and  every  day,  excepting  Sundays  and  legal 

*See  Chapter  73  of  the  Acts  of  1916,  whereby  the  salaries  of  the 
Commissioners  are  to  be  paid  wholly  by  the  State,  the  City  of  Balti- 
more being  relieved  from  paying  a  portion  of  said  salaries  from  and 
after  October  1st,  1916. 


182 

holidays.  All  sessions  shall  be  open  to  the  public,  and  shall 
stand  and  be  adjourned  without  further  notice  thereof  on  its 
record.  All  proceedings  of  the  Commission  shall  be  shown 
on  its  record  of  proceedings,  which  shall  be  a  public  record, 
and  shall  contain  a  record  of  each  case  considered  and  the 
award  paid  or  allowed  to  any  employe  of  the  Commission,  or 
to  any  other  person  for  services.  Provided,  however,  that 
any  person  in  the  employ  of  the  Commission  who  shall  di- 
vulge aiiy  information  secured  by  him  in  respect  to  the 
transactions,  property  or  business  of  any  person,  firm,  com- 
pany, or  corporation,  association  or  joint  partnership  to  any 
person  other  than  the  members  of  the  Commission,  shall  be 
guilty  of  misdemeanor  and  subject  to  a  fine  of  not  less  than 
$100  or  more  than  $500,  or  imprisonment  not  exceeding  18 
months,  in  the  discretion  of  the  Court,  and  shall  thereafter 
be  discjualified  from  holding  any  appointment  or  employ- 
ment with  the  Commission. 

Ibid,  sec.  5. 

5.  The  Commission  may  employ  a  secretary,  actuaries,  ac- 
countants, inspectors,  examiners,  experts,  clerks,  stenogra- 
phers and  other  assistants,  and  fix  their  compensation  sub- 
ject to  the  written  approval  of  the  Governor;  such  compen- 
sation shall  be  paid  out  of  the  appropriation  in  the  State 
Treasury  provided  for  in  this  Act.  The  Secretary,  actfu- 
aries,  accountants,  inspectors,  examiners,  experts,  clerks, 
stenographers  and  other  assistants  that  may  be  employed 
shall  be  entitled  to  receive  their  actual  necessary  expenses 
while  traveling  on  the  business  of  the  Commission.  Such 
expenses  shall  be  itemized  and  sworn  to  by  the  person  who 
incurred!  the  expense,  and  allowed  by  the  Commission.  The 
Commission  shall  keep  and  maintain  its  main  office  and  such 
branch  offices  as  it  shall  deem  proper  and  necessary  for  the 
administration  of  the  Act,  and  shall  provide  suitable  rooms, 
necessary  office  furniture,  supplies,  books,  periodicals  and 
maps  for  the  same.  All  necessary  expenses  shall  be  audited 
and  paid  out  of  the  appropriation  in  the  State  Treasury  pro- 
vided for  in  this  Act.  It  shall  provide  itself  with  a  seal  for 
the    authentication    of    its    orders,    awards    and    proceedings, 


183 

upon  which  shall  be  inscribed  the  words  "State  Industrial 
Accident  Commission,  State  of  Maryland — Official  Seal." 
Each  member  of  the  Commision  and  each  person  appointed 
to  office  or  employment  by  the  Commission  shall  before  en- 
tering upon  the  duties  of  his  office  or  employment  take  and 
subscribe  the  constitutional  oath  of  office. 

Ibid,  sec.  6. 

6.  The  Secretary  of  the  Commission  shall  keep  and  main- 
tain a  full  and  true  record  of  all  proceedings  of  the  Commis- 
sion, of  all  documents  or  papers  ordered  filed  by  the  Commis- 
sion or  by  its  rules,  of  decisions  or  orders  made  by  any 
member  of  the  Commission,  and  of  all  decisions  or  orders 
made  by  the  Commission  or  aproved  and  confirmed  by  it 
and  ordered  filed,  and  he  shall  be  responsible  to  the  Commis- 
sion for  the  safe  custody  and  preservation  of  all  such  docu- 
ments at  its  office.  He  shall  have  the  power  to  administer 
oaths  in  all  parts  of  the  State,  so  far  as  the  exercise  of  such 
power  is  properly  incident  to  the  performance  of  his  duty  or 
that  of  the  Commision.  He  may  designate,  from  time  to 
time,  with  the  approval  of  the  Commission,  one  of  the  clerks 
of  the  office  appointed  by  the  Commission  to  exercise  the 
powers  and  duties  of  the  secretary  during  his  absence. 
Under  the  direction  of  the  Commission,  the  secretary  shall 
have  general  charge  of  its  office,  superintend)  its  clerical 
business  and  perform  such  other  duties  as  the  Commission 
may  prescribe. 

Ibid,  sec.  7. 

7.  Each  member  of  the  Commission,  the  Secretary 
thereof,  and  any  examiner  or  inspector  shall,  for  the  purpose 
contemplated  by  this  Act,  have  power  to  issue  subpoenas, 
compel  the  attendai^ce  of  witnesses,  adminster  oaths,  cer- 
tify to  official  acts,  take  depositions  within  or  without  the 
State  of  Maryland  as  now  provided*  by  law,  compel  the  pro- 
duction of  pertinent  books,  payrolls,  accounts,  papers,  rec- 
ords, documents  and  testimony.  If  a  person  in  attendance 
before  the  Commission  or  a  Commissioner  refuse,  without 
reasonable  cause,  to  be  examined  or  to  anjswer  a  legal  and 
pertinent  question,  or  to  produce  a  book  or  paper  when  or- 


184 

dered  to  do  so  by  the  Commission,  the  Commission  may 
apply  to  any  Judge  of  the  Supreme  Bench  of  Baltimore  City, 
or  of  the  Circuit  Court  of  any  county,  upon  proof  by  affidavit 
of  the  fact,  for  a  rule  or  order  returnable  in  not  less  than 
two  or  more  than  five  days,  directing  such  person  to  show 
cause  before  the  judge  who  made  the  order,  or  any  other 
judge  aforesaid,  why  he  should  not  be  committed  to  jail; 
upon  the  return  of  such  order,  the  judge  before  whom  the 
matter  and  such  person  shall  come  on  for  a  hearing  shall 
examine  under  oath  such  person,  and  such  person  shall  be 
given  an  opportunity  to  be  heard;  and  if  the  judge  shall  de- 
termine that  such  person  has  refused,  without  reasonable 
cause  or  legal  excuse,  to  be  examined  or  to  answer  a  legal  or 
pertinent  question,  or  to  produce  a  book  or  paper  which  he 
was  ordered  to  bring  or  produce,  he  may  forthwith  commit 
the  offender  to  jail,  there  to  remain  until  he  submits  to  do 
the  act  W'hich  he  was  so  required  to  do,  or  is  discharged 
according  to  law. 

No  person  shall  be  excused  from  testifying  or  from  pro- 
ducing any  books  or  papers  or  documents  in  any  investiga- 
tion or  inquiry  by  or  upon  any  hearing  before  the  Commis- 
sion or  any  Commissioner,  when  ordered  to  do  so  by  the 
Commission  or  its  Secretary,  upon  the  ground  that  the  testi- 
mony or  evidence,  books  or  papers  or  documents  required  of 
him  may  tend  to  incriminate  him  or  subject  him  to  penalty 
or  forfeiture ;  but  no  person  shall  be  prosecuted,  punished 
or  subjected  to  any  penalty  or  forfeiture  for  or  on  account  of 
any  act,  transaction,  matter  or  thing  concerning  which  he 
shall,  under  oath,  have,  by  order  of  the  Commision  or  a 
Commissioner  or  its  inspector  or  examiner,  testify  to  or 
produce  documentary  evidence  of;  provided,  however,  that 
no  person  so  testifying  shall  be  exempt  from  prosecution 
or   punishment   for   any   perjury    committed   by   him    in   his 

testimony. 

« 
Ibid,  sec.  8. 

8.  Each  officer  who  serves  such  subpoena  shall  receive  the 
same  fee  as  the  Sheriff  would  receive  in  the  county  or  city 
where  said  witness  is  subpoenaed,  and  each  witness  who  ap- 
pears in  obedience  to  a  subpoena,  before  the  Commission  or 


I 


185 

an  inspector  or  an  examiner,  shall  receive  for  his  attendance 
the  fees  and  mileage  provided  for  witness  in  civil  cases  in 
the  Circuit  Courts  of  the  counties  or  the  Common  Law 
Courts  of  Baltimore  Citj',  as  of  the  place  where  he  gives  his 
testimony,  which  shall  be  audited  and  paid  from  the  State 
Treasury  in  the  same  manner  as  other  vouchers  aproved  by 
any  member  of  the  Commission  and  the  Secretary.  No  wit- 
ness subpoenaed  at  the  instance  of  a  party  other  than  the 
Commission,  or  an  inspector  or  examiner,  shall  be  entitled  to 
compensation  from  the  State  Treasury,  unless  the  Commis- 
sion shall  certify  that  his  testimony  was  material  to  the 
matter  investigated.  In  an  investigation  the  Commission 
may  cause  depositions  of  witnesses  residing  within  or  with- 
out the  State  to  be  taken  in  the  manner  prescribed  by  law 
for  like  depositions  taken  in  cases  pending  before  the  Circuit 
Courts  of  the  counties  or  the  Common  Law  Courts  of  Balti- 
more City,  as  is  now  or  hereafter  may  be  provided  by  law.* 

Ibid,  sec.  9. 

9.  Subject  to  the  provisions  of  this  Act,  the  State  Indus- 
trial Accident  Commission  shall  adopt  reasonable  and 
proper  rules  to  govern  its  procedure,  whiclj  procedure  shall 
be  as  summary  and  simple  as  reasonably  may  be.  It  shall 
regulate  and  provide  for  the  kind  and  character  of  notices, 
and  the  services  thereof,  and  in  cases  of  injury  by  accident 
to  employees,  the  nature  and  extent  of  the  proofs  and  evi- 
dence and  the  method  of  taking  and  furnishing  the  same  for 
the  establishment  of  the  right  to  compensation.  It  shall  de- 
termine the  nature  and  forms  of  application  of  those  claim- 
ing to  be  entitled  to  benefits  or  compensation,  and  shall  regu- 
late the  method  of  making  investigations,  physical  examina- 
tions and  inspections  and  prescribe  the  time  within  which 
adjudications  and  awards  shall  be  made ;  provided,  always, 
thai  such  rules  and  regulations  shall  conform  to  the  pro- 
visions of  this  Act. 

Ibid,  sec.  10. 

10.  The  Commission  shall  not  be  bound  by  the  usual 
common  law  or  statutory  rules  of  evidence  or  by  any  tech- 

*By  the  terms  of  the  Act  the  Commission  is  given  power  to  take  de- 
positions within  or  without  the  State,  Brenner  vs.  Brenner,  127  Md.  189. 


186 

iiical  or  formal  rules  of  procedure,  other  than  as  herein  pro- 
vided, but  may  make  the  investigation  in  such  maner  as  in 
its  judgment  is  best  calculated  to  ascertain  the  substantial 
rights  of  the  parties  and  to  carry  out  justly  the  spirit  of 
this  Act. 

Ibid,  sec.  11. 

11.  Transcribed  copy  of  the  evidence  and  proceedings  or 
any  specific  part  thereof,  by  any  investigation  taken  by  a 
stenographer  appointed  by  the  Commission,  being  certified 
and  sworn  to  by  such  stenographer^  to  be  a  true  and  correct 
transcript  of  the  testimony,  or  of  a  particular  witness,  or 
any  specific  part  thereof,  or  to  be  a  correct  transcript  of  the 
proceedings  had  on  such  investigation  so  purporting  to  be 
taken  and  subscribed,  may  be  received  in  evidence  by  the 
Commission,  with  the  same  effect  as  if  such  stenographer 
M^ere  present  and  testified  to  the  facts  certified.  A  copy  of 
such  transcript  shall  be  furnished  on  demand  to  any  party 
in  interest  upon  payment  of  the  fee  therefor,  as  provided  for 
transcripts  in  the  Circuit  Courts  of  the  counties  or  the  Com- 
mon Law  Courts  of  Baltimore  City. 

Ibid,  sec.  12. 

12.  The  Commission  shall  prepare  and  furnish,  free  of 
cost,  blank  forms  and  provide  in  its  rules  for  their  distribu- 
tion so  that  the  same  may  be  readily  available,  of  applica- 
tions for  benefits  or  compensation  notices,  to  employers, 
proof  of  injury  or  death,  of  medical  attendance,  of  employ- 
ment and  wage  earnings  and  such  other  blanks  as  may  be 
deemed  proper  and  advisable,  and  it  shall  be  the  duty  of 
employers  to  constantly  keep  on  hand  a  sufficient  suply  of 
such  blanks. 

Ibid,  sec.  13. 

13.  Annually,  on  or  before  the  first  day  of  January,  the 
State  Industrial  Accident  Commission  shall  make  a  report  to 
the  Governor,  which  shall  include  a  statement  of  the  number 
of  awards  made  by  it,  the  causes  of  the  accidents  leading  to 
the  injuries  for  which  the  awards  were  made,  and  a  detailed 
statement  of  the  expenses  of  the  Commission  and  the  condi- 
tion  of  the   State  Accident  Fund,   together   with   any   other 


187 

matters  which  the  Commission  deems  proper  to  report  to 
the  Governor,  including  any  recommendations  it  may  desire 
to  make. 

1914,  ch.   800,   sec.   14.     1916,   ch.   597. 

14.  Every  employer  subject  to  the  provision  of  this  Act 
shall  pay  or  provide  as  required  herein  compensation  accord- 
ing to  the  schedules  of  this  Act  for  the  disability  or  death  of 
his  employe  resulting  from  an  accidental  personal  injury 
sustained  by  the  employe  arising  out  of  and  in  the  course  of 
his  employment,  without  regard  to  fault  as  a  cause  of  such 
injury,  except  where  the  injury  is  occasioned  by  the  wilful 
intention  of  the  injured  employe  to  bring  about  the  injury  or 
death  of  himself  or  of  another,  or  where  the  injury  results 
solely  from  the  intoxication  of  the  injured  employe  while  on 
duty.  Where  the  injury  is  occasioned  by  wilful  intention  of 
the  Injured  employe  to  bring  about  the  injury  or  death  of 
himself  or  of  another,  or  where  the  injury  results  solely 
from  the  intoxication  of  the  injured  employe  while  on  duty, 
neither  the  injured  employe  nor  any  dependent  of  such  em- 
ploye shall  receive  compensation  under  this  Act.* 

The  liability  prescribed  by  the  last  preceeding  paragraph 
shall  be  exclusive,  except  that  if  an  employer  fail  to  secure 
the  payment  of  compensation  for  his  injured  employes  and 
their  dependents  as  provided  in  this  Act,  an  injured  employe 
or  his  legal  representative  in  case  death  results  from  the  in- 
jury may,  at  his  option,  elect  to  claim  compensation  under 
this  Act,  or  to  maintain  an  action  in  the  courts  for  damages 

*See  note  to  section  45  of  this  Article  101.  See  opinion  of  S.  I.  A, 
C,  Claim  327,  Andrew  P.  Miller,  employee,  as  to  burden  of  proof  and 
the  subject  of  intoxication.  The  claim  was  disalloyed.  See  opinion  of 
S.  I.  A.  C,  Claim  1177,  Frank  W.  Krug,  employee,  as  to  injury  arising 
in  the  course  of  employment  and  occupational  disease.  See  also  opin- 
ion of  S.  I.  A.  C,  Claim  208,  Joseph  Rimbach,  employee,  as  to  disease 
vs.  injury.  See  also  opinion  of  S.  I.  A.  C,  Claim  213,  John  Hardestay, 
employee,  as  to  effect  of  larking  at  lunch  hour  by  employee.  See  opin- 
ion of  S.  I.  A.  C,  Claim  3906,  George  F.  Smith,  as  to  stock  clerk  in 
wholesale  house  injured  in  use  of  an  elevator,  but  customarily  em- 
ployed in  more  hazardous  work.  (Daily  Record,  January  26,  1916.) 
The  letters  S.  I.  A.  C.  refer  to  the  opinions  of  the  Maryland  State 
Industrial  Accident  Commission  as  found  among  its  records  or  as  pub- 
lished in  the  Daily  Record,  a  newspaper  of  Baltimore  City. 


188 

on  account  of  such  injury;  and  in  such  an  action  the  defend- 
ant may  not  plead  as  a  defense  that  the  injury  was  caused 
by  the  negligence  of  a  fellow-servant  or  that  the  employe 
asumed  the  risk  of  his  employment,  or  that  the  injury  was 
due  to  the  contributory  negligence  of  the  employe.  If  an 
employer,  besides  employing  workmen  in  extra-hazardous 
employment  within  the  meaning  of  this  Act,  shall  also  em- 
ploy workmen  in  employments  not  extra-hazardous,  the 
provisions  of  this  Act  shall  apply  only  to  the  extra-hazard- 
ous employments  within  the  meaning  of  this  Act  and  the 
workmen  employed  therein,  except  as  provided  in  Section 
33  of  this  Act. 

1914,  ch.  800,  sec.  15.     1916,  ch.  597.     1920,   cb.   456. 
15.     The    employer  shall   secure   compensation   to   his  em- 
ployes in  one  of  the  following  ways: 

(1)  By  insuring  and  keeping  insured  the  payments  of 
such  compensation  in  the  State  Accident  Fund,  or 

(2)  By  insuring  and  keeping  insured  the  payments  of 
such  compensation  with  any  stock  corporation  or  mutual 
association  authorized  to  transact  the  business  or  Work- 
men's Compensation  Insurance  in  this  State. 

(3)  Any  such  employer  who  does  not,  with  the  approval 
of  said  Commission,  voluntarily  insure  the  payment  of  the 
compensation  by  one  of  the  methods  designated  in  the  pre- 
ceding paragraphs  in  this  section,  must  furnish  satisfactory 
proof  to  the  Commission  of  his  financial  ability  to  pay  such 
compensation  himself,  in  which  case  the  Commission  may,  at 
any  time  and  from  time  to  time  in  its  discretion,  require  the 
deposit  with  the  Commission  of  securities  such  as  are  ac- 
cepted by  the  equity  courts  of  Baltimore  City  for  the  invest- 
ment of  trust  funds  and  in  an  amount  or  amounts  to  be  de- 
termined by  the  Commission,  to  secure  the  liability  of  the 
employer  to  pay  the  compensation  specified  in  this  Act;  and 
in  order  to  be  informed  as  to  the  continued  financial  respon- 
sibility of  any  such  employer  the  Commission  may  require 
reports  from  him  annually  or  at  such  other  times  as  the 
Commission  may  deem  necessary  or  advisable,  and  may  ex- 
amine such  employer  under  oath  or  make  such  other  exami- 
nation   of   his   business    as   the    Commission   may    determine. 


189 

If  he  should  fail  to  furnish  such  satisfactory  proof,  or  give 
bond,  or  deposit  such  securities  as  required  by  the  Commis- 
sion, or  if  he  should  at  any  time  fail  to  render  satisfactory 
reports  to  the  commission  or  otherwise  satisfy  the  Commis- 
sion of  his  continued  financial  ability  to  pay  the  compensa- 
tion himself  he  shall  be  subject  to  the  provisions  of  the  first 
paragraph  of  this  section  of  this  Act,  and  shall  be  required 
by  the  Commission  to  insure  as  provided  in  the  first  para- 
graph of  said  this  section,  unless  he,  at  once,  insures  volun- 
tarily as  provided  in  the  second  paragraph  of  this  section. 

Any  employer,  subject  to  the  provisions  of  this  Act,  who, 
after  November  first,  nineteen  hundred  and  fourteen,  fails 
or  refuses  to  submit  to  said  Commission,  as  provided  in  the 
next  succeeding  paragraphs,  the  method  he  desires  to  adopt 
for  assuring  compensation,  or  who  shall  fail  to  secure  insur- 
ance by  one  of  such  methods,  shall  be  guilty  of  a  misde- 
meanor, and  shall  be  subject  to  a  fine  of  not  less  than  five 
hundred  nor  more  than  five  thousand  dollars.  The  Court 
may,  in  its  discretion,  remit  any  such  penalty,  provided  the 
employer  in  default  assures  the  compensation  as  provided  in 
this  section;  and  provided,  further,  that  he  has  paid  or  se- 
cured to  be  paid  any  compensation  or  other  benfits  under 
this  Act  which  may  have  been  awarded  against  him. 

Any  such  employer  who  may  wish  to  adopt  any  one  of  the 
methods  mentioned  in  the  preceding  paragraphs  for  assur- 
ing the  payment  of  compensation  to  his  employes  and  their 
dependents,  shall  first  submit  to  the  State  Industrial  Acci- 
dent Commission  the  method  he  wnshes  to  adopt.  The  said 
Commission  may  approve  or  reject  the  method  proposed. 
If  rejected,  the  employer  may  submit  another  method  au- 
thorized under  this  Act.  The  said  Commission  may  from 
time  to  time  revise  or  alter  its  decision  in  approving  the  elec- 
tion of  an  employer  to  adopt  any  one  of  the  methods  of  as- 
suring payment  of  the  compensation  as  provided  for  in  this 
Act,  if  such  action  is  reasonably  necessary  to  secure  and 
safeguard  such  payments  to  employes  or  for  the  diminish- 
ing and  prevention  of  accidents.  Any  action  of  the  Com- 
mission for  the  purpose  of  diminishing  or  preventing  acci- 
dents shall  not  apply  to  public  service  corporations  under  the 


190 

jurisdiction  of  the  Public  Service  Commission.  Any  de- 
cision of  said  Commission  under  this  Section  or  Section  14 
of  this  Act  may  be  reviewed  by  writ  of  certiorari  in  the  Cir- 
cuit Court  for  the  county  in  which  the  employer  may  reside 
or  in  any  of  the  Common  Law  Courts  of  Baltimore  City,  if 
the  employer  resides  in  Baltimore  City. 

Any  employer  subject  to  the  provisions  of  this  Act,  who 
fails  or  refuses  to  insure  voluntarily  the  payment  of  the  com- 
pensation specified  in  this  Act  to  his  employes  and  their 
dependents  through  one  of  the  methods  of  assurance  of  pay- 
ment, mentioned  in  the  second  paragraph  of  this  section  of 
this  Act,  or  fails  to  furnish  satisfactory  proof  to  the  Com- 
mission of  his  financial  ability  to  pay  such  compensation 
himself,  or  give  bond  or  deposit  securities  as  aforesaid,  shall 
at  any  time  after  November  first,  nineteen  hundred  and 
fourteen,  be  compelled  by  the  Commision  to  insure  to  his 
employes  and  their  dependents  the  payment  of  the  compen- 
sation specified  in  this  Act,  by  paying  to  the  State  Treasurer 
for  the  use  and  benefit  of  the  State  Accident  Fund,  herein- 
after authorized  to  be  established,  the  premium  or  taxes 
levied  and  published  by  the  Commission  for  the  group  of 
employments,  industries  or  works  to  which  said  employer 
belongs.  And  any  such  employer  who  fails  or  refuses  to  so 
insure  within  ten  days,  after  being  ordered  by  the  Commis- 
sion to  do  so,  shall  be  liable  to  the  State  in  an  amount  equal 
to  the  premium  or  taxes  required  of  him  for  six  months'  in- 
surance in  the  State  Accident  Fund,  as  a  penalty,  which, 
together  with  his  premium  or  tax  due  the  State  Accident 
Fund  for  the  first  six  months,  nuiy  be  collected  by  the  Com- 
mission in  the  same  manner  and  with  the  same  effect  as 
provided  in  Section  22  of  this  Act  for  the  collection  of  pre- 
miums or  taxes  in  default. 

In  exercising  this  discretion  conferred  upon  it  by  this  Sec- 
tion and  Section  14  of  this  Act,  the  State  Industrial  Accident 
Commision  shall  consider  the  reputation  of  any  insurance 
company  or  association,  in  which  any  such  employer  may  de- 
sire to  insure,  for  promptness  and  fairness  in  the  settlement 
of  compensation  claims,  without  unreasonable  resistance  on 
the  part  of  any  such  insurance  company  or  association,  and 


J 


191 

shall  also  consider  the  financial  strength  of  the  employer,  the 
number  of  employes  employed,  the  degree  of  hazard  to  em- 
ployes engaged  in  the  employment,  the  liklihood  or  danger 
of  several  employes  being  injured  or  killed  by  one  and  the 
same  accident,  the  relative  influence,  the  different  methods, 
by  which  compensation  may  be  assured  under  this  Act,  are 
likely  to  exert  upon  the  employer  and  his  employes  for  the 
prevention  of  accidents,  and  any  other  facts  or  conditions 
bearing  upon  the  security  and  promptness  of  payment  of  the 
compensation  and  the  prevention  of  accidents. 

1914,  ch.  800,  sec.  16.     1916,  ch.  597. 

16.  The  State  Industrial  Accident  Commision  is  hereby 
authorized  and  directed  to  create  and  establish  a  fund,  to  be 
known  as  "the  State  Accident  Fund,"  for  the  purpose  of  in- 
suring employers  against  liability  under  this  Act,  and  to 
their  employes  and  their  dependents  the  payment  of  the  com- 
pensation specified  in  this  Act.  Such  fund  shall  consist  of  all 
premiums  or  taxes  received  and  paid  into  the  fund  and  of 
property  and  securities  acquired  and  interest  earned 
through  the  use  of  moneys  belonging  to  the  fund.  Said  fund 
shall  be  administered  by  the  Commission,  and  shall  be  ap- 
plicable to  the  payment  of  losses  sustained  on  account  of 
insurance,  and  to  the  payment  of  expenses  in  the  manner 
provided   in  this  Act. 

1914,    ch.    800,    sec.    17.     1916,    ch.    597.     1922,    ch.    321. 

17.  For  the  purpose  of  creating  such  State  Accident  Fund 
each  employer  insured  in  this  fund  or  required  to  be  insured 
therein  by  this  Act  shall  pay  into  the  State  Treasury  the 
premiums  of  liability  based  upon  and  being  such  percentage 
of  the  payroll  of  such  employer  as  may  have  been  determined 
and  published  by  the  Commission,  and  be  then  in  effect. 
The  premiums  shall  be  paid  every  four  months,  and  shall  be 
the  prescribed  percentage  of  the  total  wages  paid  to  all  em- 
ploj^es  subject  to  the  Act  for  such  preceding  four  months' 
period ;  provided,  however,  that  in  order  to  create  a  fund 
available  upon  application  of  this  Act  as  aforesaid  on 
November  first,  one  thousand'  nine  hundred  and  fourteen, 
the    payments   for   the    months    of    November,    one    thousand 


192 

nine  hundred  and  fourteen,  to  February,  inclusive,  one  thou- 
sand nine  hundred  and  fifteen,  shall  be  made  on  or  before 
November  first,  one  thousand  nine  hun,di'ed  and  fourteen, 
and  be  preliminarily  based  upon  the  payroll  of  the  opera- 
tions of  the  first  four  months  of  the  year  one  thousand  nine 
hundred  and  fourteeen.  If  any  employer  be  found  to  have 
overpaid  for  such  four  months  he  may  deduct  such  over- 
payment from  the  next  succeeding  four  months'  payment 
made  to  the  fund;  if  any  employer  be  found  to  have  under- 
paid for  such  four  months,  he  shall  pay  the  deficiency  with 
the  payments  made  by  him  after  the  end  of  said  four 
months.* 

Ibid,  sec.  18 

18.  If  a  single  establishment  of  work  insured  in  the  State 
Accident  Fund  comprises  several  occupations  listed  in  Sec- 
tion 32  of  this  Act,  the  premium  shall  be  compared  according 
to  the  payroll  of  each  occupation,  if  clearly  separable;  other- 
wise an  average  rate  of  premium  shall  be  charged  for  the 
entire  establishment,  taking  into  consideration  the  number 
of  employes  and  the  relative  hazards.  In  computing  the 
payroll  the  entire  compensation  received  by  every  worl^man 
employed  in  extra-hazardous  work  and  insured  in  the  State 
Accident  Fund,  within  the  meaning  of  this  Act,  shall  be  in- 
cluded, whether  it  be  in  the  form  of  salary,  wage,  piece- 
work, overtime,  or  any  allowance  in  the  way  of  profit- 
sharing  premium  or  otherwise,  and  whether  payable  in 
money,  board  or  otherwise.  Provided  the  money  value  of 
board  and  similar  advantages  shall  have  been  fixed  by  par- 
ties at  the  time  of  hiring. 

Ibid,  sec.  19.     1920,  ch.  456. 

19.  It  shall  be  the  duty  of  the  Commission  to  classify  any 
industries  subject  to  this  Act  mentioned  or  not  mentioned 
which  are  insured  in  the  State  Accident  Fund.  And  the 
Commission  shall  have  power  on  or  before  the  first  day  of 
January  of  each  year  to  reclassify  such  industries,  or  oft- 
ener,  if,  in  the  opinion  of  the  Commission,  the  same  should 

*As  amended  by  Chapter  597,  Acts  of  1916;  and  by  Chapter  321, 
Acts  of  1922,  effective  June  1st,  1922. 


193 

he  deemed  just  and  advantageous;  or  to  create  additional 
hazard  and  determine  the  risk  of  the  different  classes,  and 
fix  the  rates  of  premium  for  each  class,  according  to  the 
risks  of  the  same  sufficiently  large  to  guarantee  a  workmen's 
compensation  fund  from  year  to  year.  It  shall  be  the  duty  of 
the  Commission  in  determining  the  rates,  in  order  to  create 
a  fund  sufficiently  large  to  guarantee  a  workmen's  compen- 
sation fund  from  year  to  year  to  also  reclassify  from  time  to 
time  the  industries  or  occupations,  in  order  that  there  may 
be  a  flexible  adjustment  of  the  rates  as  the  hazard  fluctu- 
ates, and  to  use  all  means  in  their  power  through  the  rate 
adjustment  to  lessen  the  opportunities  for  injuries  to  the 
workmen.  The  classification  so  determined  and  the  rates  of 
premium  established  shall  be  applicable  for  such  year  unless 
a  reclassification  should,  in  the  opinion  of  the  Commission, 
necessitate  a  change  of  rates  within  such  year ;  and  based 
on  each  one  hundred  dollars  of  the  gross  annual  payroll  of 
each  employer  in  any  class;  provided,  also,  that  for  the  pur- 
poses of  this  Act  the  pay  of  the  employe  partly  within  and 
partly  without  the  State  shall  be  deemed  to  be  such  propor- 
tion of  the  total  pay  of  such  employe  as  his  service  within  the 
State  bears  to  his  services  outside  the  State. 

The  Commission,  in  its  administration  of  the  State  Acci- 
dent Fund,  shall  have  the  power  to  declare  dividends  to  the 
subscribers  or  policy  holders  in  the  Fund,  either  in  the  form 
of  cash  refunders  or  credits,  when  the  financial  condition  of 
the  Fund  is  such,  in  the  judgment  of  the  Commission,  as  to 
make  such  dividend  declaration  warranted  and  advisable. 

Ibid,  sec.  20. 

20.  The  Commission  may  establish  and  require  all  em- 
ployers insured  in  the  State  Accident  Fund  to  install  and 
maintain  a  uniform  payroll.  The  Commission  shall  ascer- 
tain and  establish  the  amounts  to  be  paid  into  and  out  of  the 
Accident  Fund,  issue  proper  receipts  for  moneys  received, 
and  certificates  for  benefits  accrued  and  accruing  from  the 
State  Accident  Fund. 


7) 


194 


Ibid,  sec.  21. 


21.  Every  employer  subject  to  the  operation  and  effect  of 
this  Act,  who  shal  linsure  in  the  State  Accident  Fund,  shall 
every  four  months  submit  a  report  to  the  Commission  herein 
created,  according  to  the  regulations  and  requirements  it 
may  prescribe,  of  his  payroll  for  four  months  then  ending. 
A  failure  to  comply  with  this  section  shal  subject  the  em- 
ployer to  an  extra  contribution  of  one  hundred  dollars,  to  be 
collected  by  the  Commission  in  a  civil  action  in  its  name. 
The  amount  collected  under  this  section  shall  be  paid  into 
tehe  State  Accident  Fund. 

Any  employer  who  shall,  with  fraudulent  intent,  misrep- 
resent to  the  Commission  the  amount  of  payroll  upon  which 
the  premium  under  this  Act  is  based,  shal  be  liable  to  the 
Commission  in  ten  times  the  amount  of  the  difference  in  the 
premium  paid  and  the  amount  the  employer  should  have 
paid.  The  liability  to  the  Commission  under  this  provision 
shal  be  inforced  in  a  civil  action  in  the  name  of  the  Com- 
mission. All  sums  collected  under  this  section  shal  be  paid 
into  the  State  Accident  Fund. 

Ibid,  sec.  22. 

22.  If  an  employer  shall  default  in  any  payment  required 
to  be  made  by  him  to  the  State  Accident  Fund,  the  amount 
due  from  him  shall  be  collected  by  civil  action  against  him  in 
the  name  of  the  State  of  Maryland,  and  it  shall  be  the  duty 
of  the  Commission,  on  the  first  Monday  of  each  month,  after 
November  first,  nineteen  hundred  and  fourteen,  to  certify  to 
the  Attorney-General  of  the  State  the  names  and  residences, 
or  places  of  business,  of  all  employers  known  to  the  Commis- 
sion to  be  in  default  for  such  payment  or  payments  for  a 
longer  period  than  five  days  and  the  amount  due  from  each 
employer,  and  it  shall  then  be  the  duty  of  the  Attorney- 
General  forthwith  to  bring  or  cause  to  be  brought  against 
each  employer  a  civil  action  in  the  proper  Court  for  the  col- 
lection of  such  amount  so  due,  and  the  same,  when  collected, 
shall  be  paid  into  the  State  Accident  Fund,  and  each  em- 
ployer's compliance  with  the  provisions  of  this  Chapter,  re- 
quiring payments  to  be  made  into  the  State  Accident  Fund, 


195 

shall  date  from  the  time  of  the  payment  of  said  money  so 
collected  as  aforesaid  to  the  said  Commission  for  credit  to 
the  State  Accident  Fund.*t 

Ibid,  sec.  23. 

23.  Ten  per  centum  of  the  premiums  collected  from  em- 
ployers insured  in  the  State  Accident  Fund  shall  be  set  aside 
by  the  Commission  for  the  creation  of  a  surplus  until  such 
surplus  shall  amount  to  the  sum  of  fifty  thousand  dollars, 
and  thereafter  five  per  centum  of  such  premiums  until  such 
time  as,  in  the  judgment  of  said  Commission,  such  surplus 
shall  be  sufficiently  large  to  cover  the  catastrope  hazard. 
The  Commission  shall  also  set  up  and  maintain  a  reserve 
adequate  to  meet  anticipated  losses  and  carry  all  claims  and 
policies  to  maturity. 

Ibid,  sec.  24. 

24.  The  Treasurer  of  the  State  shall  be  the  custodian  of 
the  State  Accident  Fund,  and  all  disbursements  therefrom 
shall  be  paid  by  him  upon  order  or  voucher,  approved  and 
signed  by  the  chairman  or  acting  chairman  and  sccreetary  of 
the  Commission,  and  directed  to  the  Comptroller  of  the 
State,  Avho  shall  draw  his  warrant  therefor.  It  shall  be*  the 
duty  of  the  Treasurer  to  keep  and  maintain  the  fund  herein 
created  separate  and  distinct  from  other  State  funds.  On 
TiUd  after  January  1st,  1915,  the;  oblij/ation  in  the  bond  of 
the  State  Treasurer  shall  contaiji  a  provision  securing  the 
protection  of  this  fund. 

Ibid,  sec.  25. 

25.  Whenever  and  as  often  as  theie  shall  be  in  the  hands 
of  the  Treasurer,  any  sum  belonging  lo  the  State  Accident 
Fund  not  likely,  in  the  opinion  of  the  Commission,  to  be  re- 
quired for  immediate  use,  it  shall  be  the  duty  of  tlie  Board  of 
Public  Works,  when  called  upon  oy  the  Commission,  to  in- 
vest   the    same    in    interest-bearing    securities,    such    as    are 

*See  opinion  of  S.  I.  A.  C,  Claim  1587,  Emil  Plassil,  employee,  as  to 
when  policy  in  State  fund  is  effective.     Held  when  premium  is  paid. 

fThe  Attorney-General  shall  represent  the  State  Industrial  Accident 
Commission,  1916,  chapter  560. 


196 

accepted  by  the  Equity  Courts  of  Baltimore  City  for  the  in- 
vestment of  trust  funds,  and  when  and  as  it  may  become 
necessary  or  expedient  to  use  the  monies  so  loaned  or  in- 
vested the  Board  of  Public  "Works  shall,  when  called  upon  by 
the  Commission,  collect  or  sell  or  otherwise  realize  upon  any 
such  loan  or  investment,  and  any  interest  accruing  upon  any 
such  loan  or  investment  as  well  as  any  interest  received  upon 
the  deposit  of  moneys  belonging  to  said  fund  shall  be  cred- 
ited to  said  fund. 

The  State  Treasury  may  deposit  any  portion  of  the  State 
fund  not  needed  for  immediate  use,  in  the  manner  and  sub- 
ject to  all  the  provisions  of  law  respecting  the  deposit  of 
other  State  funds  by  him.  Interest  earned  by  such  portion 
of  the  State  Accident  Fund  deposited  by  the  State  Treasurer 
shall  be  collected  by  him  and  placed  to  the  credit  of  the  fund. 

Ibid,  sec.   26.     1916,  ch.  379,  p.    779, 

26.  Any  employer,  after  entering  the  State  Accident 
Fund,  may  withdraw  from  said  fund  after  the  period  of  one 
year  upon  giving  sixty  (60)  days'  notice  of  his  intention  so 
to  do, -and  upon  paying  all  arrears,  if  any,  of  premiums  due 
the  «aid  fund,  and  upon  assuring  compensation  to  his  em- 
ployes by  one  of  the  other  methods  specified  in  the  Act. 

1914,  ch.  800,  sec.  27.     1916,  ch.  597.     1920,,  ch.  456. 

27.  The  entire  expense  of  conducting  and  administering 
the  State  Accident  Fund,  as  likewise  all  other  expense  of  the 
State  Industrial  Accident  Commission,  shall  be  paid  in  the 
first  instance  by  the  State  out  of  the  monies  appropriated  for 
the  maintenance  of  the  State  Industrial  Accident  Commis- 
sion and  the  payment  of  the  salaries  and  expenses  of  said 
Commission  and  its  officers  and  employes.  In  the  month  of 
January,  nineteen  hundred  and  eighteen,  and  annually  there- 
after  in  such  month  the  Commission  shall  ascertain  the  just 
expense  incurred  by  the  Commission  during  the  preceding 
calendar  year,  in  conducting  and  in  the  administration  of  the 
State  Accident  Fund,  by  including  the  salaries  of  the  super- 
intendent of  said  fund  and  such  other  employes  of  the  Com- 
mission   whose    services    were    rendered    exclusively    to  said 


197 

* 
fund,  and  all  other  expenses  incurred  exclusively  for  said 
fund ;  and  the  amount  of  such  salaries  and  expenses  shall  be 
chargeable  to  the  State  Accident  Fund.  And  if  there  be 
employes  of  the  Commission,  other  than  the  members  them- 
selves and  the  Secretary,  whose  time  is  devoted  partly  to  the 
general  work  of  the  Commission  alid  partly  to  the  work  of 
the  State  Accident  Fund,  and  in  case  there  are  any  other 
expenses  which  are  incurred  jointly  on  behalf  of  the  general 
work  of  the  Commission  and  the  State  Accident  Fund,  an 
equitable  apportionment  of  the  salaries  of  such  employes 
and  expenses  shall  be  made  by  the  Commission  and  the  part 
thereof  which  is  applicable  to  the  State  Accident  Fund  shall 
likewise  be  chargeable  thereto ;  and  the  Commission  shall 
authorize,  in  the  same  manner  as  other  disbursements  from 
the  State  Accident  Fund  are  authorized,  the  whole  amount 
so  chargeable  to  the  State  Accident  Fund  to  be  transferred 
from  said  fund  by  the  Treasurer  to  the  State  Treasury  to 
reimburse  the  State  for  the  moneys  so  appropriated  and  ex- 
pended in  conducting  and  administering  the  State  Accident 
Fund  for  the  calendar  year  ending  December  thirty-first, 
nineteen  hundred  and  seventeen,  and  for  each  calendar  year 
thereafter. 

As  soon  as  practicable  after  January  first,  nineteen  hun- 
dred and  eighteen,  and  annually  thereafter,  the  Commission 
shall  ascertain  as  fully  and  accurately  as  possible  the  total 
payroll  of  all  the  employers  of  this  State,  subject  to  the  pro- 
vision of  this  Act,  for  the  preceding  calendar  year,  whether 
insured  in  the  State  Accident  Fund,  any  stock  company,  or 
mutual  association,  or  self-insured,  and  shall  also  calculate 
and  ascertain  the  amount  paid  by  the  State  for  adminintra- 
tive  expenses  of  the  State  Industrial  Accident  Commission 
during  said  preceding  calendar  year,  excluding  the  amount 
chargeable  to  the  State  Accident  Fund  under  the  preceding 
paragraph  of  this  section.  The  Commission  shall  then  cal- 
culate and  determine  the  percentage  which  the  total  amount 
of  such  salaries  and  expenses,  other  than  the  amount  charge- 
able to  the  State  Accident  Fund,  bore  to  the  total  payroll, 
ascertained  as  aforesaid  for  that  year,  of  all  the  employers 
of  this  State  subject  to  the  provisions  of  this  Act ;  and  the 


198 

percentage  so  calculated  and  determined  shall  be  assessed 
against  all  such  employers  carrying  their  own  insurance  in 
proportion  to  their  several  payrolls,  and  all  insurance  car- 
riers, including  the  State  Accident  Fund,  in  proportion  to 
the  aggregate  payroll  of  employers  insured  therewith,  as  a 
special  tax  for  the  maintenance  of  the  State  Industrial  Acci- 
dent Commission,  other  than  for  conducting  and  administer- 
ing the  State  Accident  Fund,  for  the  calendar  year  ending 
December  thirty-first,  nineteen  hundred  and  seventeen,  and 
for  each  calendar  year  thereafter;  provided,  however,  that 
the  total  amount  to  be  assessed  against  and  paid  by  such 
insurance  carriers  and  self -insurers  shall  not  exceed  eighty 
thousand  dollars  for  any  one  year. 

Payment  of  said  tax  may  be  enforced  by  civil  action  in 
the  name  of  the  State  of  Maryland,  and  the  amounts  so  as- 
sessed and  collected  by  the  Commission  shall  be  paid  into 
the  State  Treasury  to  reimburse  the  State  for  this  portion 
of  the  expense  of  administering  the  Workmen's  Compensa- 
tion Law.  And  the  Commission  shall  be  and  is  hereby 
clothed  with  such  power  and  authority  to  examine  payrolls 
and  require  reports  from  employers  and  insurance  carriers 
as  may  be  reasonable  and  necessary  to  carry  out  the  provis- 
ions of  this  section  and  to  adopt  rules  and  regulations  in 
regard  thereto. 

1914,  ch.  800,  sec.  28. 

28.  If  this  Act  shall  be  hereafter  repealed,  all  moneys 
which  are  in  the  State  Accident  Fund  at  the  time  of  the  re- 
peal shall  be  subject  to  such  disposition  as  may  be  provided 
by  the  Legislature,  and  in  default  of  such  legislative  pro- 
vision, distribution  thereof  shall  be  in  accordance  with  the 
justice  of  the  matter,  due  regard  being  had  to  obligations  of 
compensation  incurred  and  existing. 

Ibid,   sec.   29.     1920,  ch.  456. 

29.  Every  policy  for  the  insurance  of  the  compensation 
herein  provided  for,  or  against  liability  therefor,  shall  be 
deemed  to  be  made  subject  to  the  provisions  of  this  Act.  No 
company   or  association  shall  enter  into  any  such  policy  of 


199 

insurance  until  such  company  or  association  shall  first  ob- 
tain from  the  Insurance  Commissioner  of  Maryland  a  license 
of  authority  for  the  purpose,  which  said  Commissioner  of 
Insurance  shall  have  full  power  and  authority  from  time  to 
time  to  determine  the  adequacy  of  its  or  their  premium 
rates  for  carrying  compensation  insurance  as  provided  in 
this  law,  and  until  the  form  of  such  policy  shall  have  been 
aproved  by  the  State  Industrial  Acident  Commission;  and 
said  Insurance  Commissioner  shall  have  full  power  and 
authority  to  require  said  insurance  companies  to  estal)lish 
and  maintain  adequate  rates  to  cover  respective  risks  to 
Avhich  their  policies  are  applicable  under  the  provisions  of 
this  Act.  Any  insurance  company  or  employer  carrying  his 
own  insurance,  desiring  to  do  compensation  insurance  in 
this  State  shall  be  required  to  keep  and  maintain  a  local  otlfice 
in  charge  of  a  competent  person,  who  shall  handle  all  the 
compensation  work  for  said  insurance  company  or  self- 
insurer.  Any  person,  firm,  corporation,  insurance  company, 
association  and  self-insurer  violating  the  provisions  of  this 
Section  shall  be  subject  to  a  fine  of  not  less  than  $-300  nor 
more  than  $1,000,  for  each  offense,  and  upon  conviction 
thereof  the  Insurance  Commissioner  may  revoke  the  license 
of  authority  for  doing  business  in  this  Stfite  of  such  person, 
corporation,  firm,  insurance  company  and  association  and 
the  State  Industrial  Accident  Commission  m^y  prohibit 
such  self-insurer  from  carrying  its  own  insurance. 

Ibid,  sec.  30. 

30.  Every  policy  of  insurance  covering  the  liability  of  the 
employer  for  compensation,  issued  by  a  stock  company  or  by 
a  mutual  association  authorized  to  transact  workmen's  com- 
pensation insurance  in  this  State,  shall  contain  a  provision 
setting  forth  the  right  of  the  Commission  to  enforce  in  the 
name  of  the  State  of  Maryland  for  the  benefit  of  the  person 
entitled  to  the  compensation  insured  by  the  policy,  either  by 
filing  a  separate  aplication  or  by  making  the  insurance  car- 
rier a  party  to  the  original  application,  the  liability  of  the 
insurance  carrier  in  whole  or  in  part  for  the  payment  of 
such    compensation;    provided,    however,    that   payment     in 


200 

whole  or  in  part  of  such  compensation,  by  either  the  em- 
ployer or  the  insurance  carrier,  shall,  to  tlie  extent  thereof, 
be  a  bar  to  the  recovery  against  the  other  of  the  amount 
so  paid. 

Every  such  policy  shall  contain  a  provision  that,  as  be- 
tween the  employe  and  the  insurance  carrier,  the  notice  to 
or  knowledge  of  the  occurrence  of  the  injury  on  the  part  of 
the  employer  shall  be  deemed  notice  or  knowledge  as  the 
case  may  be,  on  the  part  of  the  insurance  carrier;  the  juris- 
diction of  the  employer  shall,  for  the  purpose  of  this  Act,  be 
the  jurisdiction  of  the  insurance  carrier,  and  that  the  insur- 
ance carrier  shall,  in  all  things,  be  bound  by  and  subject  to 
the  orders,  findings,  decisions  or  awards  rendered  against 
the  employer  for  the  payment  of  compensation  under  the 
provisions  of  this  Act. 

Every  such  policy  shall  contain  a  provision  to  the  effect 
that  the  insolvency  or  bankruptcy  of  the  employer  shall  not 
relieve  the  insurance  carrier  from  the  payment  of  compen- 
sation for  injuries  or  death  sustained  by  an  employe  during 
the  life  of  such  policy. 

Every  contract  or  agreement  of  an  employer,  the  purpose 
of  which  is  to  indemnify  him  from  loss  or  damage  on  ac- 
count of  the  injury  of  an  employe  by  accidental  means,  or  on 
account  of  the  negligence  of  such  employer  or  his  officer, 
agent  or  servant,  if  engaged  in  extra-hazardous  employ- 
ment, shall  be  absolutely  void  unless  it  shall  also  cover  liabil- 
ity for  the  payment  of  the  compensation  provided  for  by  this 
Act. 

No  contract  or  insurance  issued  by  a  stock  company  or 
mutual  association,  against  liability  arising  under  this  Act, 
shall  be  canceled  within  the  time  limited  in  such  contract  for 
its  expiration  until  at  least  ten  days  after  notice  of  intention 
to  cancel  such  contract,  on  a  date  specified  in  such  notice, 
shall  be  filed  in  the  office  of  the  Commission  and  also  served 
on  the  employer.  Such  notice  shall  be  served  on  the  em- 
ployer by  delivering  it  to  him  or  by  sending  it  by  mail,  by 
registered  letter,  addressed  to  the  employer  at  his  or  its  last 
known  place  of  residence;  provided,  that  if  the  employer  be 


201 

a  partnership,  then  such  notice  may  be  so  given  to  any  one  of 
the  partners,  and  if  the  employer  be  a  corporation,  then  the 
notice  may  be  given  to  any  agent  or  officer  of  the  corpora- 
tion upon  whom  legal  process  may  be  served. 

Ibid,  sec.  31. 

31.  Nothing  herein  shall  effect  any  existing  contract  of 
policy  of  employer's  liability  insurance,  or  the  liability  of 
any  mutual  insurance  association,  or  any  arrangement  now 
existing  between  employers  and  employes,  providing  for  the 
payment  of  such  employes,  their  families,  dependents  or 
representatives  of  sick,  acident  or  death  benefits  in  addition 
to  the  compensation  provided  for  by  this  Act;  but  liability 
for  the  compensation  specified  in  this  Act  shall  not  be  re- 
duced or  affected  by  any  insurance,  contribution  or  other 
benefit  whatsoever,  due  to  or  received  by  the  person  entitled 
to  such  compensation,  and  the  person  so  entitled  shall,  irre- 
spective of  any  such  insurance  or  other  contract,  have  the 
right  to  recover  the  compensation  directly  from  the  em- 
ployer.* 

Ibid,   sec.   32.     1916,   ch.   597.     1920,   eh.    456. 

32.  Compensation  provided  for  in  this  Act  shall  be  pay- 
able for  injuries  sustained  or  death  incurred  by  employes 
engaged  in  the  following  extra-hazardous  employments: 

1.  The  operatioUj  including  construction  and  repair  of 
railways  operated  by  steam,  electric  or  other  motive  power, 
street  railways  and  incline  railways,  but  not  in  their  con- 
struction, when  constructed  by  any  person  other  than  the 
company  which  owns  or  operates  the  railways,  including 
work  of  express,  sleeping,  parlor  and  dining  car  employes 
on  railway  trains. 

2.  Construction  and  operation  of  railways  not  included  in 
paragraph  one. 

*Settlement.— See  opinion  of  S.  I.  A.  C,  Claim  469,  Mrs.  William 
Lessner,  claimant.  Petition  to  withdraw  claim  in  order  to  effect  pri- 
vate settlement  refused. 

See  opinion  of  S.  I.  A.  C,  Claim  215,  Emma  R.  Chambers,  claimant, 
as  to  dependency  with  benefits  from  other  sources  and  average  weekly 
wage. 


202 

li.  The  operation,  including  construction  and  repair  of  car 
shops,  machine  shops,  steam  and  power  plants,  and  other 
works  for  the  purpose  of  any  such  railway,  or  used  or  to  be 
used  in  connection  with  it  when  operated,  constructed  or  re- 
paired by  the  company  which  owns  or  operates  the  railway. 

4.  The  operation,  including  construction  and  repair,  of 
car  shops,  machine  shops,  steam  and  power  plants,  not  in- 
cluded in  paragraph  3. 

5.  The  operation,  including  construction  and  repair,  of 
telephone  lines  and  wires  for  the  purpose  of  the  business  of 
a  telephone  company,  or  used  or  to  be  used  in  connection  with 
its  business,  when  constructed  or  operated  by  the  company. 

6.  The  operation,  including  construction  and  repair,  of 
telegraph  lines  and  wires  for  the  purposes  of  the  business  of 
a  telegraph  company,  or  used  or  to  be  used  in  connection  with 
its  business,  when  constructed  or  operated  by  the  company. 

7.  Construction  of  telegraph  and  telephone  lines  not  in- 
cluded in  paragraphs  5  and  6. 

8.  The  operation,  within  or  without  the  State,  including 
repair  of  vessels  other  than  vessels  of  other  States  or  coun- 
tries used  in  interstate  or  foreign  commerce,  when  operated 
or  repaired  by  the  company.* 

9.  Shipbuilding,  including  construction  and  repair  in  a 
shipyard  or  elsewhere,  not  included  in  paragraph  8. 

10.  Longshore  work,  including  the  loading  or  unloading 
of  cargoes  or  parts  of  cargoes  of  grain,  coal,  ore,  freight, 
general  merchandise,  lumber  or  other  products  or  materials, 
or  moving  or  handling  the  same  on  any  dock,  platform  or 
place,  or  in  any  warehouse  or  other  place  of  storage.! 

*See  opinion  S.  I.  A.  C,  Claim  578,  J.  Peter  Clawson,  employe.  Com- 
mission is  without  jurisdiction  when  the  injured  employe  is  employed 
under  shipping  articles  and  engaged  at  the  time  of  the  accident  in 
purely  maritime  employment.     (Daily  Record,  Nov.  27,  1915.) 

See  opinion  of  S.  I.  A.  C,  Claim,  3521,  Emma  Luebenheusen,  claim- 
ant, as  to  jurisdiction  of  Commission  in  case  of  admiralty.  (Daily 
Record,  Feb.  5,  1916.) 

fSee  opinion  of  S.  I.  A.  C,  Claim  1719,  Ida  K.  Hill,  claimant,  as  to 
jurisdiction  of  Commission' re  longshoreman.  (Daily  Record,  Feb.  16, 
1916.)  See  also  opinion  in  case  or  claim  of  Emma  Luebenheusen. 
(Daily  Record,  Feb.  5,  1916.) 


203 

11.  Subaqueous   or   caisson   construction  and   pile   driving. 

12.  Construction,  installation  or  operation  of  electric  light 
and  electric  power  lines,  dynamos  or  appliances  and  power 
transmission   lines. 

13.  Paving,  sewer  and  subway  construction,  work  under 
compressed  air,  excavations,  tunneling  and  shaft  sinking, 
well  digging,  laying  and  repair  of  underground  pipes,  cables 
and  wires,  not  included  in  paragraph  5  of  this  section. 

14.  Lumbering,  logging,  l-iver-driving,  rafting,  booming, 
saw  mills,  shingle  mills,  lath  mills;  manufacture  of  veneer 
and  of  excelsior,  manufacture  of  staves,  spokes  or  headings. 

15.  Pulp  and  paper  mills. 

16.  Manufacture  of  furniture,  interior  woodwork,  organs, 
pianos,  piano  actions,  canoes,  small  boats,  coffins,  wicker 
and  rattan  ware,  upholstering,  manufacture  of  mattresses 
or  bed  springs. 

17.  Planing  mills,  sash  and  door  factories,  manufacture 
of  wooden  and  corrugated  paper  boxes,  cheese  boxes,  mould- 
ings, window  and  door  screens,  window  shades,  carpet 
SAveepers,  wooden  toys,  articles  and  wares  or  baskets. 

18.  Mining,  reduction  of  ores  and  smelting  preparation 
of  metals  or  minerals. 

19.  Quarries ;  sand,  shale,  clay  or  gravel  pits,  lime-kilns ; 
manufacture  of  brick,  tile,  terra-cotta,  fire-proofing,  or  pav- 
ing blocks,  manufacture  of  calcium  carbide,  cement,  asphalt 
or  paving  material. 

20.  Manufacture  of  glass,  glass  product,  glassware,  por- 
celain or  pottery. 

21.  Iron,  steel  or  metal  foundries;  rolling  mills;  manu- 
facture of  castings,  forgings,  heavy  engines,  locomotives, 
machinery,  safest  anchors,  cables,  rails,  shafting,  wires, 
tubing,  pipes,  sheet  metal  boilers,  furnaces,  stoves,  structu- 
ral steel,  iron  or  metal. 

22.  Operation  and  repair  of  stationary  engines  and  boil- 
ers, not  included  in  other  paragraphs  of  this  section.* 

*See  Note  to  section  35  of  Article  101. 


204 

23.  Manufacture  of  small  castings  or  forgings,  metal 
wares,  in;struments,  utensils  and  articles,  hardware,  nails, 
wire  goods,  screens,  bolts,  metal  beds,  sanitary  water,  gas  or 
electric  fixtures,  light  machines,  typewriters,  cash  registers, 
adding  machines,  carriage  mountings,  bicycles,  metal  toys, 
tools,  cutlery,  instruments,  photographic  cameras  and  sup- 
plies, sheet  metal  products,  buttons. 

24.  Manufacture  of  agricultural  implements,  threshing 
machines,  traction  engines,  wagons,  carriages,  sleighs,  ve^ 
hides,  automobiles,  motor  trucks,  toy  wagons,  sleighs,  olr 
baby  carriages.! 

25.  Manufacture  of  explosive  and  dangerous  chemicals, 
corrosive  acids  or  salts,  ammonia,  gasoline,  petroleum,  pe- 
troleum products,  celluloid,  gas,  charcoal,  gun  powder  or 
ammunition. 

26.  Manufacture  of  paint,  color,  varnish,  oil,  japans,  tur- 
pentine, printing  ink,  printers'  rollers,  tar,  tarred,  pitched 
or  asphalted  paper. 

27.  Distilleries,  breweries ;  manufacture  of  spirituous  or 
malt  liquors,  alcohol,  wine,  mineral  water  or  soda  waters. 

28.  Manufacture  of  drugs  and  chemicals,  not  specified  in 
paragraph  25,  medicines,  dyes,  extracts,  pharmaceutical  or 
toilet  preparations,  soaps,  candles,  perfumes,  non-corrosive 
acids,  or  chemical  preparations,  fertilizers,  including  gar- 
bage disposal  plants;  shoe  blackening  or  polish. 

29.  Milling ;  manufacture  of  cereals  or  cattle  foods,  ware- 
housing ;  storage ;  operation  of  grain  elevators. 

30.  Packing  houses,  abattoirs,  manufacture  or  prepara- 
tion of  meats  or  meat  products  or  glue. 

31.  Tanneries.. 

32.  Manufacture  of  leather  goods  and  products,  belting, 
saddlery,  harness,  trunks,  valises,  boots,  shoes,  gloves,  um- 
brellas, rubber  goods,  rubber  shoes,  tubing,  tires  or  hose. 

33.  Canning  or  preparation  of  fruit,  vegetables,  fish  or 
foodstuffs ;  pickle  factories  and  sugar  refineries. 

34.  Bakeries,  including  manufacture  of  crackers  and  bis- 
cuits, manufacture  of  confectionery,  spices  or  condiments. 

fSee  opinion  of  S.  I.  A.  C,  Claim  281,  Joseph  Sebrick,  employe,  as 
to  blacksmithing  in  connection  with  wage  on  mauufacture. 


205 


35.  Manufacture  of  tobacco,  cigars,  cigarettes  or  tobacco 
products. 

36.  Manufacture  of  cordage,  ropes,  fibre,  brooms  or 
brushes;  manilla  or  hemp  products. 

37.  Flax  mills;  manufacture  of  textiles  or  fabrics,  spin- 
ning, weavilig  and  knitting  manufactories;  manufacture  of 
yarn,  thread,  hosiery,  cloth,  blankets,  carpets,  canvas,  bags, 
shoddy  or  felt. 

38.  Manufacture  of  men's  or  women's  clothing,  white 
wear,  shirts,  collars,  corsets,  hats,  caps,  furs  or  robes. 

39.  Power  laundries ;  dyeing,  cleaning  or  bleaching. 

40.  Printing,  photo-engraving,  sterotyping,  electrotyping, 
lithographing,  embossing;  manufacture  of  stationery,  paper, 
cardboard  boxes,  bags  or  wall  paper ;  and  bookbinding. 

41.  The  operation,  otherwise  than  on  tracks,  on  streets, 
yvays  or  elsewhere  of  cars,  trucks,  wagons  or  other  vehicles,  and 
rollers  and  engines  propelled  by  steam,  gas,  gasoline,  electric, 
mechanical  or  other  power,  or  drawn  by  horses  and  mules.* 

42.  Stone  cutting  or  dressing;  marble  works;  manufacture 
of  artificial  stones;  steel  building  and  ridge  construction;  in- 
stallation of  elevators,  fire  escapes,  boilers,  engines,  or  heavy 
machinery ;  brick-laying,  tile-laying,  mason  work,  stone  setting, 
concrete  work,  plastering;  and  manufacture  of  concrete  blocks; 
structural  carpentry;  painting,  decorating  or  renovating;  sheet 
metal  work ;  roofing ;  construction,  repair  and  demolition  of 
buildings  and  bridges ;  plumbing,  sanitary  or  heating  engineer- 
ing ;  installation  and  covering  of  pipes  or  boilers. 

*This  section  is  the  one  amended  by  1916,  ch.  597.  The  occupation 
of  a  driver  of  an  ice  wagon  comes  within  the  provision  of  this  sub- 
section. (The  Court  was  construing  the  Act  prior  to  the  amendment 
of  1916.)  American  Ice  Company  vs.  Fitzhugh  (Daily  Record,  May  6, 
1916),  decided  in  Maryland  Court  of  Appeals,  April  26,  1916.  See  also 
opinion  of  S.  I.  A.  C,  Claim  36,  John  W.  Russel,  employe  as  to  cover- 
age in  the  case  of  drivers  of  horses  and  mules  (Daily  Record,  Decem- 
ber 7,  1915.) 


206 

43.  In  addition  to  the  employments  set  out  in  the  preceding 
paragraphs,  this  Act  is  intended  to  apply  to  all  extra  hazardous 
employments  not  specifically  enumerated  herein,  and  to  all 
work  of  an  extra-hazardous  nature,  t* 

1914,  ch.  800,  sec.  33. 
33.  Any  employer,  his  employe  or  employes  engaged  in  works 
not  extra-hazardous,  within  the  meaning  of  this  Act,  may,  by 
their  joint  election,  filed  with  the  Commission,  accept  the  pro- 
visions of  this  Act,  and  such  acceptance,  when  approved  by  the 
Commission,  shall  subject  them  to  the  provisions  of  this  Act  to 
all  intents  and  purposes  as  if  they  had  been  originally  included 
in  its  terms, 

fCoverage.— See  opinion  of  S.  I.  A.  C,  Claim  262,  William  L.  Ben- 
nett, employe,  a  private  chauffeur.  See  opinion  of  S.  I.  A.  C,  Claim 
966,  John  A.  Lewis,  employe.  Claim  as  waiter  and  porter  at  hotel 
disallowed.  See  opinion  of  S.  I.  A.  C,  Claim  529,  Rachel  Peaco,  claim- 
ant, who  was  a  chauffeur's  helper.  Claim  allowed.  See  opinion  of 
S.  I.  A.  C,  Claim  470,  Lillian  Lipscomb,  employe.  Her  claim  as  sales- 
lady disallowed.  See  opinion  of  S.  I.  A.  C,  Claim  607,  Arlie  P  Pippin. 
Claim,  saleslady  in  dry  goods  store.  Claim  disallowed.  See  opinion 
of  S.  I.  A.  C,  Claim  506,  Mrs.  Laura  Roro,  charwoman  at  moving- 
picture  establishment.  Claim  disallowed.  See  opinion  of  S.  I.  A.  C, 
Claim  645,  Harry  Blechman,  employe  Claimant  was  a  ticket-seller  in 
moving-picture  business.  Claim  disallowed.  See  opinion  of  S.  I.  A.  C, 
Claim  746,  Philip  L.  Smallwood,  employe.  Porter  in  a  warehouse. 
Claim  disallowed.  See  opinion  of  S.  I.  A.  C,  Claim  1177,  Frank  W. 
Krug,  employe,  as  to  occupational  disease.  See  opinion  of  S.  I.  A.  C, 
Claim  761,  Mary  Jones,  employe.  Nurse.  Claim  disallowed.  See 
opinion  of  S.  I.  A.  C,  Claim  2509.  Winfield  D.  Denham,  employe,  as  to 
farm  helper.  Claim  was  disallowed.  See  opinion  of  S.  I.  A.  C,  Claim 
2736,  Leonora  P.  Moore,  claimant,  as  to  riding  in  a  wagon  of  customer. 
Claim  disallowed.  (Daily  Record,  April  15,  1916.)  See  opinion  of  S. 
I.  A.  C,  Claim  464,  Mrs.  William  J.  Lesner,  claimant.  The  deceased 
was  a  driver  on  a  bread  wagon,  and  it  appeared  that  the  foot  brake 
had  slipped  and  injured  his  leg",  from  which  it  was  claimed  death  re- 
sulted. The  claim  was  allowed.  See  opinion  of  S.  I.  A.  C,  Claim  144, 
Lucy  Forest,  employe,  as  to  coverage.  Cook  at  hotel.  See  opinion  of 
S.  I.  A.  C,  Claim  334,  Toba  and  Mary  Brenner,  claimants,  as  to  junk 
dealer.  Claim  allowed.  This  claim  was  appealed  to  the  Baltimore 
City  Court,  and  then  to  the  Court  of  Appeals  in  IMaryland,  upon  a 
question  of  jurisdiction,  which  alone  was  passed  upon.  Brenner  vs. 
Brenner,  127,  Md.  189. 

t*Amendment  by  General  Assembly  of  1920. 


207 

Any  -vvorkman  of  the  age  of  sixteen  years  and  upwards  may 
himself  exercise  the  election  hereby  authorized.  The  right  of 
election  hereby  authorized  shall  be  exercised  on  behalf  of  any 
workman  under  the  age  of  sixteen  years  by  his  parents  or 
guardian.  Nothing  herein  shall  be  construed  to  apply  to  work- 
men of  less  than  the  minimum  age  prescribed  by  law  for  the 
employment  of  minors  in  the  occupation  in  which  such  work- 
man shall  be  engaged. 

The  provisions  of  this  Act  shall  apply  to  employers  and  em- 
ployes engaged  in  intrastate  and  also  in  interstate  or  foreign 
commerce,  for  whom  a  rule  of  liability  or  method  of  compen- 
sation has  been  or  may  be  established  by  the  Congress  of  the 
United  States,  only  to  the  extent  that  their  mutual  connection 
with  intrastate  work  may  and  shall  be  clearly  separable  and 
distinguishable  from  interstate  or  foreign  commerce,  except 
that  any  such  employer  and  any  of  his  workmen  only  in  this 
State  may,  with  the  approval  of  the  Commission  and  so  far  as 
not  forbidden  by  any  Act  of  Congress,  voluntarily  accept  the 
provisions  of  this  Act  by  filing  written  acceptances  with  the 
Commission,  which  shall  subject  the  acceptors  to  the  provisions 
of  this  Act  to  all  intents  and  purposes  as  if  they  had  been  origi- 
nally included  in  its  terms.* 

Ibid,  sec.  33i^ 

34.  Whenever  there  shall  have  been  enacted  by  the  Congress 
of  the  United  States,  and  shall  be  in  etfect,  any  act  providing 
an  exclusive  remedy  and  compensation  to  employes  of  common 
carriers  by  railroads  while  employed  in  interstate  or  foreign 
commerce,  who  sustain  personal  injury  by  accident  arising  out 
of  and  in  the  course  of  such  employment  and  resulting  in  dis- 
ability, or  to  the  dependents  of  such  employes  in  case  such  in- 
jury results  in  death,  it  shall  be  lawful  for  any  such  common 
carrier  by  railroad  in  this  State  and  its  employes  or  any  of 
them,  by  agreement  between  such  employer  and  employes,  to 
provide  for  the  payment  by  the  employer  of  compensation  in 

*See  opinion  of  S.  I.  A.  C,  Claim  1824,  Alice  Hopkins,  claimant,  as 
to  jurisdiction  of  Commission  as  effected  by  Federal  Emploj^er's  Lia- 
bility Act  with  distinction  between  negligence  and  non-negligence  case 
in  Interstate  Railway  employ.     (Daily  Record,  March  9,  1916.) 


208 


the  amounts  at  the  times  and  in  the  manner  specified  in  sai<i 
Act  of  Congress  to  any  employe  who,  while  employed  by  such 
employer  in  commerce  or  business  wholly  within  this  State, 
sustains  personal  injury  by  accident  arising  out  of  and  in 
the  course  of  his  employment  and  resulting  in  his  disability,  or 
to  the  dependents,  as  defined  in  said  Act  of  Congress,  of  such 
employe  in  case  such  injury  results  in  his  death ;  and  in  and  by 
such  agreement  to  stipulate  and  agree  that,  except  as  provided 
therein,  such  employer  shall  not  be  civilly  liable  for  any  injury 
to  or  death  of  such  employe  resulting  from  any  such  accident. 
If  any  such  employer  shall  file  with  the  Commission  an  in- 
strument in  writing  under  its  corporate  seal,  offering  to  enter 
into  such  an  agreement  with  all  and  any  of  its  employes  in  this 
State  and  referring  to  such  Act  of  Congress,  and  shall  cause 
notice  of  such  offer  filed  to  be  published  once  each  week  for 
three  successive  weeks  following  the  date  of  such  filing  in  a 
newspaper  published  in  each  county  in  this  State,  through 
which  such  employer  runs  regularly  any  freight  or  passenger 
train  and  in  two  newspapers  published  in  the  City  of  Balti- 
more, if  such  employer  runs  regularly  any  freight  or  passenger 
train  into  or  through  said  city,  every  employe  of  such  employer 
shall  be  conclusively  presumed  to  accept  such  offer  of  the  em- 
ployer and  to  have  entered  into  such  agreement,  unless  such 
employe  shall,  within  thirty  days  after  the  filing  of  such  offer 
by  the  employer,  file  with  the  Commission  a  notice  in  writing 
or  statement  declining  such  offer ;  and  at  the  expiration  of  said 
period  of  thirty  days  the  terms  of  said  agreement  shall  be  mutu- 
ally binding  upon  the  employer  and  upon  every  employe  not  so 
declining,  but  any  employe  or  the  employer  may,  at  any  time, 
by  filing  with  the  Commission  not  less  than  thirty  days'  notice 
in  writing  of  his  or  its  intention  so  to  do,  terminate  such  agree- 
ment upon  this  or  its  part  or  to  all  accidental  injuries  occuring 
after  the  expiration  of  such  notice. 

Ibid,  sec.  33i^.     1922,  ch.  303. 

35.  Whenever  the  State,  county,  city  or  any  municipality 
shall  engage  in  any  extra-hazardous  work,  within  the  mean- 
ing of  this  Act,  whether  for  pecuniary  gain  or  otherwise,  in 


209 


which  workmen  are  employed  for  wages,  this  Act  shall  be 
applicable  thereto.  Whenever  and  so  long  as  by  State  law, 
City  Charter  or  Municipal  Ordinance  provision  equal  or  better 
than  that  given  under  the  terms  of  this  Act  is  made  for  muni- 
cipal employes  injured  in  the  course  of  employment,  such  em- 
ploj'es  shall  not  be  entitled  to  the  benefits  of  this  Act.*t 

Ibid,  sec.  36.     1916,  ch.  597.     1916,  ch.  368.     1920,  ch.  456. 

36.  Each  employe  (or  in  ease  of  death  his  family  or  de- 
pendents) entitled  to  receive  compensation  under  this  Article 
shall  receive  the  same  in  accordance  with  the  following  sche- 
dule and  except  as  in  this  Article  otherwise  provided,  such  pay- 
ment shall  be  in  lieu  of  any  and  all  rights  of  action  whatso- 
ever against  any  person  whomsoever. 

(1)  Permanent  total  disability.  In  case  of  total  disability 
adjudged  to  be  permanent,  sixty-six  and  two-thirds  per  centum 
of  the  average  weekly  wages  shall  be  paid  to  the  employe  dur- 
ing the  continuance  of  such  total  disability,  not  to  exceed  a 
maximum  of  eighteen  dollars  per  week  and  not  less  than  a 
minimum  of  eight  dollars  per  week,  unless  the  employe's  es- 
tablished weekly  wages  are  less  than  eight  dollars  per  week  at 
the  time  of  the  injury,  in  which  event  he  shall  receive  compen- 
sation in  an  amount  equal  to  his  average  weekly  wages,  but  not 
to  exceed  a  total  of  $5000.  Loss,  or  loss  of  use  of  both  hands, 
or  both  arms,  or  both  feet  or  both  legs,  or  both  eyes,  or  of  any 
two  thereof,  shall,  in  the  absence  of  conclusive  prooi"  to  the 
contrary,  constitute  permanent  total  disability.  In  all  other 
cases  permanent  total  disability  shall  be  determined  in  accord- 
ance with  the  facts. 

(2)  Temporary  total  disability.  In  case  of  temporary  total 
disability,  sixtj^-six  and  two-thirds  per  centum  of  the  average 
weekly  wages  shall  be  paid  to  the  employe  during  the  contin- 
uance thereof,  but  not  to  exceed  a  maximum  of  eighteen  dollars 
per  week  and  not  less  than  a  minimum  of  eight  dollars  per 

*As  amended  by  Chapter  303,  Acts  of  1922,  effective  April  13,  1922. 

fSee  opinion  of  S.  I.  A.  C,  Claim  407,  Martha  C.  Myer,  claimant,  as 
to  coverage  (municipal  employer),  death  (cause  of),  extra-hazardous 
(firing  heating  boiler).     Claim  against  city  allowed. 


210 

week,  unless  the  employe's  established  weekly  wages  are  less 
than  eight  dollars  per  week  at  the  time  of  the  injury,  in  which 
event  he  shall  receive  compensation  equal  to  his  full  wages ;  but 
in  no  case  to  continue  more  than  six  years  from  the  date  of  the 
injury  or  to  exceed  thirty-seven  hundred  and  fifty  dollars  in 
the  aggregate. 

(3)  Permanent  partial  disability.  In  case  of  disability 
partial  in  character  but  permanent  in  quality,  the  compensa- 
tion shall  be  sixty-six  and  two-thirds  per  centum  of  the  average 
weekly  wages,  in  no  case  to  exceed  eighteen  dollars  per  week 
and  not  less  than  a  minimum  of  eight  dollars  per  week  unless 
the  employe 's  established  weekly  wages  are  less  than  eight  dol- 
lars per  week  at  the  time  of  the  injury,  in  which  event  he  shall 
receive  compensation  equal  to  his  full  wages,  but  in  no  case  to 
exceed  more  than  thirty-seven  hundred  and  fifty  dollars  in  the 
aggregate  and  shall  be  paid  to  the  employes  for  the  period 
named  in  the  schedule  as  follows : 

Thumb — For  the  loss  of  a  thumb,  fifty  weeks. 

First  Finger — For  the  loss  of  a  first  finger,  commonly  called 
the  index  finger,  thirty  weeks. 

Second  Finger — For  the  loss  of  a  second  finger,  twenty-five 
weeks. 

Third  Finger — For  the  loss  of  a  third  finger,  twenty  weeks. 

Fourth  Finger — For  the  loss  of  a  fourth  finger,  commonly 
called  the  little  finger,  fifteen  weeks. 

The  loss  of  the  second  or  distal  phalange  of  the  thumb  shall 
be  considered  to  be  equal  to  the  loss  of  one-half  of  such  thumb ; 
the  loss  of  more  than  one-half  of  such  thumb  shall  be  consid- 
ered to  be  equal  to  the  loss  of  the  whole  thumb ;  the  loss  of  the 
third  or  distal  phalange  of  any  finger  shall  be  considered  to  be 
equal  to  the  loss  of  one-third  of  such  finger.  The  loss  of  the 
middle  or  second  phalange  of  any  finger  shall  be  considered  to 
be  equal  to  the  loss  of  two-thirds  of  such  finger.  The  loss  of 
more  than  the  middle  and  distal  phalange  of  any  finger  shall 
be  considered  to  be  equal  to  the  loss  of  the  whole  of  such  finger ; 
provided,  however,  that  in  no  case  shall  the  amount  received 
for  more  than  one  finger  exceed  the  amount  provided  in  this 
schedule  for  the  loss  of  a  hand. 


211 


Great  Toe — For  the  loss  of  a  great  toe,  twenty-five  weeks. 

Other  Toes — For  the  loss  of  one  of  the  toes,  other  than  the 
great  toe,  ten  weeks. 

Hand — For  the  loss  of  a  hand,  one  hundred  and  fifty  weeks. 

Arm — For  the  loss  of  an  arm,  two  hundred  weeks. 

Foot — For  the  loss  of  a  foot,  one  hundred  and  fifty  weeks. 

Leg — For  the  loss  of  a  leg,  one  hundred  and  seventy-five 
weeks. 

Eye — For  the  loss  of  an  eye,  one  hundred  weeks. 

Hearing — For  the  total  loss  of  hearing  of  one  ear,  fifty 
weeks ;  for  the  total  loss  of  hearing  of  both  ears,  one  hundred 
weeks. 

Loss  of  Use — Permanent  loss  of  use  of  a  hand,  arm,  foot,  leg 
or  eye,  shall  be  considered  as  the  equivalent  of  the  loss  of  such 
hand,  arm,  foot,  leg  or  eye,  and  for  the  loss  of  the  fractional 
part  of  the  vision  of  either  one  or  both  eyes,  the  injured  em- 
ploye shall  be  compensated  in  like  proportion  to  the  compen- 
sation for  total  loss  of  vision,  and  in  arriving  at  the  fractional 
part  of  vision  lost  regard  shall  not  be  had  for  the  effect  that 
correcting  lens  or  lenses  may  have  upon  the  eye  or  eyes. 

Amputations  —  Amputation  between  the  elbow  and  the 
wrist  shall  be  considered  as  the  equivalent  of  the  loss  of  a  hand. 
Amputation  between  the  knee  and  the  ankle  shall  be  consid- 
ered as  the  equivalent  of  the  loss  of  a  foot  Amputation  at  or 
above  the  elbow  shall  be  considered  as  the  loss  of  an  arm. 
Amputation  at  or  above  the  knee  shall  be  considered  as  the  loss 
of  the  leg. 

The  compensation  for  the  foregoing  specific  injuries  shall  be 
paid  in  addition  to,  and  consecutively  with,  the  compensation 
hereinbefore  provided  in  Sub-Section  2  of  this  section. 

If  an  employe  dies,  the  right  to  any  compensation  payable 
under  this  Sub-Section,  unpaid  at  the  date  of  his  death,  shall 
survive  to  and  vest  in  his  personal  representatives. 

Other  Cases — In  all  other  cases  in  this  class  of  disability  the 
compensation  shall  be  fifty  per  centum  of  the  difference  be- 
tween his  average  weekly  wages  and  his  wage-earning  capacity 
thereafter  in  the  same  employment  or  otherwise,  if  less  than 


212 


before  the  accident  (but  not  to  exceed  eighteen  dollars  per 
week),  payable  during  the  continuance  of  such  partial  disa- 
bility, but  not  to  exceed  three  thousand  dollars,  and  subject  to 
reconsideration  of  the  degree  of  such  impairment  by  the  Com- 
mission on  its  own  motion  or  upon  application  of  any  party  in 
interest. 

In  all  cases  where  there  has  been  an  gmpulatioii  of  a  part 
of  any  member  of  the  body  herein  specified,  or  the  loss  of  the 
use  of  any  part  thereof,  for  which  compensation  is  not  specially 
provided  herein,  the  Commission  shall  allow  compensation  for 
such  proportion  of  the  total  number  of  weeks  allowed  for  the 
amputation  or  the  loss  of  the  use  of  the  entire  member,  as  the 
affected  or  amputated  portion  thereof  bears  to  the  whole. 

Disfigurements — For  other  mutilations  and  disfigurements, 
not  hereinbefore  provided  for,  compensation  shall  be  allowed 
in  the  discretion  of  the  Commission,  for  not  less  than  ten  weeks 
nor  more  than  one  hundred  weeks,  as  the  Commission  may  fix, 
in  each  case  having  due  regard  to  the  character  of  the  mutila- 
tion and  disfigurement  as  compared  with  mutilation  and  injury 
hereinbefore  specifically  provided  for. 

(4)  Temporary  partial  disability.  In  case  of  temporary 
partial  disability,  except  the  particular  cases  mentioned  in  sub- 
division three  of  this  section,  an  injured  employe  shall  receive 
fifty  per  centum  of  the  difference  between  his  average  weekly 
wages  and  his  Avage-earning  capacity  thereafter  in  the  same 
employment  or  otherwise,  if  less  than  before  the  accident,  but 
not  to  exceed  ($18.00)  eighteen  dollars  per  week  during  the 
continuance  of  such  partial  disability,  but  not  in  excess  of 
three  thousand  five  hundred  dollars,  except  as  otherwise  pro- 
vided in  this  Article. 

In  case  the  injury  causes  death  within  the  period  of  three 
years  the  benefits  shall  be  in  the  amounts  and  to  the  persons 
following : 

If  there  be  no  dependents,  the  disbursements  shall  be  lim- 
ited to  the  expense  provided  for  in  Section  thirty-seven  hereof. 

]f  there  are  wholly  dependent  persons  at  the  time  of  death, 
the  payment  shall  be  sixty-six  and  two-thirds  per  cent  of  the 
average  weekly  wages,  not  to  exceed,  however,  a  maximum  of 


213 


($18)  eighteen  dollars  per  week,  and  not  less  than  a  minimum 
of  ($8)  eight  dollars  per  week,  unless  the  deceased  employe's 
established  weekly  wages  were  less  than  eight  dollars  per  week 
at  the  time  of  the  injury,  in  which  event  the  compensation  shall 
be  an  amount  equal  to  the  average  weekly  wages,  and  to  con- 
tinue for  the  remainder  of  the  period  between  the  date  of  death 
and  four  hundred  and  sixteen  weeks  after  the  date  of  injury, 
and  not  to  amount  to  more  than  a  maximum  of  five  thousand 
dollars,  nor  less  than  a  minimum  of  one  thousand  dollars. 

If  there  are  no  wholly  dependent  persons  at  the  time  of 
the  death,  but  are  partly  dependent  persons,  those  partly  de- 
pendent shall  receive  compensation  as  follows :  The  weekly 
payments  to  such  dependents  shall  be  in  an  amount  not  ex- 
ceeding sixty-six  and  two-thirds  per  centum  of  the  average 
weekly  wages  or  ($18.00)  eighteen  dollars  per  week  but  may 
in  the  discretion  of  the  Commission  be  for  a  less  amount  per 
week  and  to  continue  for  all  or  such  portion  of  the  period  of 
416  weeks,  after  the  date  of  injury,  as  the  Commission  in  each 
case  may  determine,  and  not  to  amount  to  more  than  a  maxi- 
mum of  three  thousand  dollars. 

The  following  persons  shall  be  presumed  to  be  wholly  de- 
pendent for  support  upon  a  deceased  emploj^e :  A  wife  or  in- 
valid husband  ("invalid"  meaning  one  physicallj^  or  mentally 
incapacitated  from  earning),  a  child  or  children  under  the  age 
of  sixteen  years,  (or  over  said  age  if  physically  or  mentally 
incapacitated  from  earning)  living  with  or  dependent  upon  the 
parent  at  the  time  of  the  injury  or  death. 

In  all  other  cases,  questions  of  dependency,  in  whole  or  in 
part,  shall  be  determined  in  accordance  with  the  facts  in  each 
particular  ease  existing  at  the  time  of  the  injury  resulting  in 
death  of  such  employe,  but  no  person  shall  be  considered  as 
dependent  unless  such  person  be  a  father,  mother,  grandfather, 
grandmother,  stepchild  or  grandchild,  or  brother  or  sister  of 
the  deceased  employe,  including  those  otherwise  specified  in 
this  section. 

The  right  to  any  compensation  payable  to  any  dependent 
and  unpaid  at  the  date  of  death  of  any  such  dependent  shall 
survive  to  and  be  vested  in  the  surviving  dependents  as  the 


214 

Commission  may  determine,  if  there  be  such  surviving  depend- 
ents, and  if  there  be  none  such,  then  the  compensation  shall 
cease. 

Compensation  under  this  Article  to  alien  dependent  widows,, 
children  and  parents,  not  residents  of  the  United  States,  shall 
be  the  same  in  amount  as  is  provided  in  each  case  for  residents, 
except  that  at  any  time  within  one  year  after  an  accident  re- 
sulting in  death  the  Commission  may,  in  its  discretion,  convert 
any  payments  thereafter  to  become  due  to  such  beneficiaries 
into  a  lump  sum  payment,  not  in  any  case  to  exceed  twenty- 
four  hundred  dollars,  by  paying  a  sum  equal  to  three-fourths 
of  the  then  value  of  such  payments. 

Non-resident  alien  dependents  may  be  officially  represented 
by  the  consular  officers  of  the  nation  of  which  such  alien  or 
aliens  may  be  citizens  or  subjects,  and  in  such  cases  the  con- 
sular officers  shall  have  the  right  to  receive,  for  distribution  to 
such  non-resident  alien  dependents,  all  compensation  awarded 
hereunder,  and  the  receipt  of  such  consular  officers  shall  be  in 
full  discharge  of  all  sums  paid  to  and  received  by  them.* 

Ibid,  sec.  36.     1916,  ch.  597,  sec.  37.     1920,  ch.  456. 
37.     In  addition  to  the  compensation  provided  for  herein,  the 
employer  shall  promptly  provide  for  an  injured  employe  such 

♦Compensation. — See  opinion  of  S.  I.  A.  C,  Claim  156,  Ledda  Leon- 
ardo, employe.  Continuation  of  compensation  and  able  to  work.  See 
opinion  of  S.  I.  A.  C,  Claim  49,  Clarence  E.  Groves,  employe,  compen- 
sation.    Duration  of  disability. 

Coverage. — See  opinion  of  S.  I.  A.  C,  Claim  589,  Arthur  J.  Messick, 
employe.  Claim  disallowed  when  employer  and  claimant  are  one  and 
the  same  person. 

Dependency. — See  opinion  of  S.  I.  A.  C,  Claim  530,  Mrs.  Margaret 
Nelson.  Partial  dependency  and  mother.  See  opinion  of  S.  I.  A.  C, 
Claim  128,  Jeremiah  Ortman  claimant's  father  and  sisters.  See  opin- 
ion of  S.  I.  A.  C,  Claim  1384,  Mary  M.  Dollan  as  to  dependency  of  wife 
and  children  living  apart  from  husband  and  father.  (Daily  Record, 
November  24,  1915.)  See  opinion  of  S.  I;  A.  C,  Claim  3246,  Rosina 
Amantea,  claimant,  as  to  common-law  marriage.  Claim  was  disal- 
lowed.    (Daily  Record,  December  31,  1915.)     See  opinion  of  S.  I.  A.  C, 


215 

medical,  svirgieal  or  other  attendance  or  treatment,  nurse  and 
hospital  services,  medicines,  crutches,  apparatus,  artificial 
hands,  arms,  feet  and  legs  as  may  be  required  by  the  Commis- 
sion in  an  amount  not  to  exceed  three  hundred  dollars.  If  an 
employer  fails  to  provide  the  same,  the  injured  employe  may  do 
so  at  the  expense  of  the  employer.  All  fees  and  other  charges 
for  such  treatment  and  services  shall  be  subject  to  regulation 
by  the  Commission,  and  shall  be  limited  to  such  charges  as  pre- 
vail in  the  same  community  for  similar  treatment  of  injured 
persons  of  a  like  standard  living,  and  in  case  death  ensues  from 
the  injury  within  three  years,  reasonable  funeral  expenses  shall 
be  allowed,  not  to  exceed  the  sum  of  one  hundred  and  twenty- 
five  dollars.  Any  bill  for  funeral  expenses  contracted  for  an 
amount  in  excess  of  one  hundred  and  twenty-five  dollars  shall 
be  null  and  void  and  uncollectible  either  out  of  the  compensa- 
tion allowed  or  out  of  the  personal  assets  of  those  obligating 
themselve's  to  pay,  unless  and  until  said  bill  is  approved  by  the 
Commission.  Provided,  however,  that  if  there  are  no  depend- 
ents and  the  deceased  employe  leaves  sufficient  estate  to  pay 
same,  all  expenses  of  last  sickness  and  burial  shall  be  paid  by 
said  estate  and  not  by  the  employer  or  insurance  company, 
or  Commission  out  of  the  State  Accident  Fund,  as  the  case 
may  be.    The  Commission  shall  have  full  power  to  adopt  rules 

Claim  3072,  Mrs.  Fannie  Leveter  Maxwell,  as  to  claim  of  wife  living 
apart.  See  opinion  of  S.  I.  A.  C,  Claim  3257.  Elinora  Jackson,  claim- 
ant as  to  wife  and  children  living  apart  from  husband  and  father. 
(Daily  Record,  January  29,  1916.)  See  opinion  of  S.  I.  A.  C,  Claim 
789,  Jane  Irvine,  claimant.  Claim  of  sister  allowed.  See  opinion  of 
S.  I.  A.  C,  Claim  2887,  Mary  C.  Graff,  claimant.  Claim  filed  by  sister 
of  deceased  and  disallowed.  See  opinion  of  S.  I.  A.  C,  Claim  1649, 
Ella  Doyer,  claimant.  Position  of  a  friend.  Claim  disallowed.  As  to 
dependency  of  wife,  living  apart  from  her  husband,  see  opinion  of  S. 
I.  A.  C,  Claim  2,  Mary  E.  Duvall,  claimant. 

Disability.— See  opinion  of  S.  I.  A.  C,  Claim  248,  Makelina  Lysocki, 
claimant,  as  to  partial  dependency.  See  opinion  of  S.  I.  A.  C,  Claim 
1518,  Ernest  Walthman,  employe.  Wages  paid  in  full  during  disability. 
See  opinion  of  S.  I.  A.  C,  Claim  215,  Emma  R.  Chambers,  claimant,  as 
to  dependency  with  benefits  from  other  source  and  average  weekly 
wage. 


216 

and  regulations  witli  respect  to  furnisliing  medical,  nurse,  hos- 
pital services  and  medicines  to  injured  employes  entitled  there- 
to and  for  the  payment  therefor.* 

1914,  ch.  800,  sec.  37. 

38.  Notice  of  an  injury  for  which  compensation  is  payable 
under  this  Act  shall  be  given  to  the  employer  within  ten  days 
after  the  accident,  and  also  in  case  of  death  of  the  employe 
resulting  from  such  injury,  within  thirty  days  after  such  death. 
Such  notice  may  be  in  writing,  and  contain  the  name  and  ad- 
dress of  the  employe,  and  state  in  ordinary  language  the  time, 
place,  nature  and  cause  of  the  injury,  and  be  signed  by  him  or 
by  a  person  on  his  behalf,  or  in  case  of  death,  by  any  one  or 
more  of  his  dependents,  or  by  a  person  on  their  behalf.  The 
failure  to  give  such  notice,  unless  excused  by  the  Commission 
either  on  the  ground  that  notice  for  some  sufficient  reason 
could  not  have  been  given,  or  on  the  ground  that  the  State 
Accident  Fund,  insurance  company,  or  employer,  as  the  ease 
may  be,  has  not  been  prejudiced  thereby  shall  be  a  bar  to  any 
claim  under  this  Act. 

"Whenever  an  accident  occurs  to  any  employe,  it  shall  be  the 
duty  of  the  employer  to  at  once  report  that  accident,  and  the 
injury  resulting  therefrom,  to  the  Commission,  and  also  to  any 
local  representative  of  the  Commission.  Such  report  shall 
slate  (a)  the  time,  cause  and  nature  of  the  accident  and  in- 
juries, and  probable  duration  of  the  injury  resulting  therefrom ; 
(b)  whether  the  accident  arose  out  of  or  in  the  course  of  the 
injured  person's  employment;  (c)  any  other  matters  the  rules 
and  regulations  of  the  Commission  may  prescribe,  t 


♦Medical  expenses.— See  claim  227,  S.  I.  A.  C,  Frederick  Snyder, 
employe.  See  claim  1274  of  S.  I.  A.  C,  William  T.  Yeadeker,  em- 
ploye. See  Claim  330  of  S.  I.  A.  C,  Mike  Smithyscuke,  employe,  as  to 
failure  to  secure  medical  services  Claim  allowed.  See  Claim  86  of 
S.  I.  A.  C,  Charles  E.  Scott,  employe,  refusal  to  submit  to  operation. 

tSee  opinion  of  S.  I.  A.  C,  Claim  604,  Michael  Haningan,  employe. 
Claim  disallowed,  as  employe  failed  to  report  same  for  over  a  month, 
and  thereby  deprived  employer  of  opportunity  to  investigate.  See 
opinion  of  S.  I.  A.   C,  Claim   2057,  Frank  J.  Tippen,   employe,   a^  to 


217 


Ibid,  sec.  38.     1916,  ch.  597.     1920,  ch.  456. 

39.  When  an  employe  is  entitled  to  compensation  under  this 
Act  he  shall  file  with  the  Commission  his  application  and  the 
report  of  the  physician,  provided  he  was  attended  by  a  physi- 
cian of  his  own  selection,  within  thirty  days  after  the  beginning 
of  his  disability,  for  which  compensation  is  claimed,  and  failure 
to  do  so  unless  excused  by  the  Commission,  either  on  the  ground 
that  the  insurance  carrier  or  the  employer  has  not  been  preju- 
diced thereby,  or  for  some  other  sufficient  reason,  shall  be  a  bar 
to  any  claim  under  this  Act. 

When  death  results  from  injury  the  parties  entitled  to  com- 
pensation under  this  Act,  or  some  one  in  their  behalf,  shall 
make  application  for  same  to  the  Commission  within  one  year 
from  the  date  of  death,  which  application  must  be  accompanied 
with  proof  of  death  and  proof  of  relationship  showing  the 
parties  to  be  entitled  to  compensation  under  this  Act,  certifi- 
cates of  attending  physician,  if  attended  by  a  physician,  and 
such  other  proof  as  may  be  required  by  the  rules  of  the  Com- 
mission. 

Ibid,  sec.  39. 

40.  The  Commission  shall  make  or  cause  to  be  made  such 
investigation  of  any  claim  as  it  deems  necessary,  and  upon  ap- 
plication of  either  party  shall  order  a  hearing,  and  within, 
thirty  days  after  a  claim  for  compensation  is  submitted  under 
this  section,  or  such  hearing  closed,  shall  make  or  deny  an 
award,  determining  such  claim  for  compensation,  and  file  the 
same  in  the  office  of  the  Commission,  together  with  a  statement 
of  its  conclusions  of  fact  and  rulings  of  law.  The  Commission 
may,  if  it  deems  proper,  on  the  written  application  of  any  party 
in  interest,  or  on  its  own  motion,  require  the  claimant  to  appear 

notice  of  injury  to  employer.  (Daily  Record,  October  16,  1915.)  See 
opinion  of  S.  I.  A.  C,  Claim  4109.  Marie  Bothner,  employe,  as  to  notice 
and  effect  when  failure  to  give  notice  has  not  prejudiced  the  employer 
and  right  of  Commission  to  waive  effect  of  failure  to  give  notice.  (Daily 
Record,  February  3,  1916.)  See  opinion  of  S.  I.  A.  C,  Claim  704,  Ben- 
jamin F.  Trone,  employe  as  to  failure  of  notice  to  employer.  Claim 
allowed.  See  opinion  of  S.  I.  A.  C,  Claim  1701,  Walter  M.  Wells,  em- 
ploye. Notice  to  foreman.  Claim  allowed.  See  opinion  of  S.  I.  A.  C, 
Claim  689,  Catherine  Fitzhugh,  claimant. 


218 


before  an  arbitration  committee  appointed  by  it  and  consisting 
of  one  representative  of  employes,  one  representative  of  enir 
ployers,  and  either  a  member  of  the  Commission  or  a  person 
specially  deputized  by  the  Commission  to  act  as  chairman,  be- 
fore which  the  evidence  in  regard  to  the  claim  shall  be  adduced 
and  by  which  it  shall  be  considered  and  reported  upon,  with 
the  right  of  either  party  to  appeal  to  the  Commission  from  the 
finding  of  said  arbitration  committee  on  all  questions  of  law 
and  fact. 

If  changes  of  circumstances  warrant  an  increase  or  rear- 
rangement of  compensation,  like  application  shall  be  made. 
No  increase  or  rearrangement  shall  be  operative  for  any  period 
prior  to  application  therefor. 

Ibid,  sec.  40. 

41.  Any  person  who  shall  knowingly  secure  or  attempt  to 
secure  larger  compensation  or  compensation  for  a  longer  term 
than  he  is  entitled  to,  or  knowingly  secure  or  attempt  to  secure 
compensation  when  he  is  not  entitled  to  any,  shall  be  guilty  of 
a  misdemeanor,  and  upon  conviction  thereof  shall  be  fined  not 
exceeding  five  hundred  dollars,  or  imprisonment  not  exceeding 
twelve  months,  or  both,  in  the  discretion  of  the  Court,  and  shall 
from  and  after  such  conviction,  cease  to  receive  any  compensa- 
tion. 

Ibid,  sec.  41. 

42.  Any  employe  entitled  to  receive  compensation  under 
this  Act  is  required,  if  requested  by  the  Commission,  to  submit 
himself  for  medical  examination  at  a  time  and  from  time  to 
time  at  a  place  reasonably  convenient  for  the  employe,  and  as 
may  be  provided  by  the  rules  of  the  Commission.  If  the  em- 
ploye refuse  to  submit  to  any  such  examination,  or  obstructs 
the  same,  his  right  to  compensation  shall  be  suspended  until 
such  examination  has  taken  place,  and  no  compensation  shall  be 
payable  during  or  for  account  of  such  period. 

Ibid,  sec.  42.     1920,  cb.  456. 

43.  Should  a  further  accident  occur  to  an  employe  already 
receiving  payment  under  this  Act  for  a  disability,  or  who  has 


219 

been  previously  the  recipient  of  a  lump  sum  payment  under 
this  Act,  his  future  compensation  shall  be  adjusted  according 
to  the  other  provisions  of  this  Act,  and  with  regard  to  the 
compensation  under  this  Act.  In  case  of  the  remarriage  of  a 
dependent  widow  of  a  deceased  employe,  without  dependent 
children  at  the  time  of  the  remarriage,  she  shall  receive  com- 
pensation for  one  year  after  the  date  of  her  remarriage,  pro- 
vided there  is  so  much  of  the  compensation  previously  award- 
ed her  outstanding.  No  widow  or  widower  shall  receive  any 
benefits  under  this  Act  where  the  marriage  shall  have  taken 
place  after  the  person  entitled  to  benefits  hereunder  shall  have 
been  injured,  provided  there  are  no  dependent  children. 

If  aggravation,  diminution  or  termination  of  disability  takes 
place  or  be  discovered  after  the  rate  of  compensation  shall  have 
been  established  or  compensation  terminated  in  any  case,  the 
Commission  may,  upon  the  application  of  any  party  in  interest 
or  upon  its  own  motion,  readjust  for  future  application  the  rate 
of  compensation  in  accordance  with  rules  in  this  section  pro- 
vided, or  in  a  proper  case,  terminate  the  payments. 

A  husband  or  wife  of  an  injured  employe,  who  has  deserted 
said  employe  for  more  than  one  year  prior  to  the  time  of  the 
injury  or  subsequently  shall  not  be  a  beneficiary  under  this 
Act. 

•       Ibid,  sec.  43.     1920,  ch.  456. 

44.  If  a  beneficiary  shall  reside  or  remove  out  of  the  United 
States,  and  shall  have  been  such  non-resident  for  a  period  of 
one  year,  the  Commission  may,  in  its  discretion,  convert  any 
payments  thereafter  to  become  due  to  such  beneficiary  into  a 
lump  sum  payment,  not  in  any  case  to  exceed  twenty-four  hun- 
dred dollars,  by  paying  a  sum  equal  to  three-fourths  of  the 
then  value  of  such  payments. 

Ibid.  sec.  44. 

45.  If  injury  or  death  results  to  a  workman  from  the  de- 
liberate intention  of  his  employer  to  produce  such  injury  or 
death,  the   employe,  the  widow,  widower,   child,  children  or 


220 

dependents  of  the  employe  shall  have  the  privilege  either  to 
take  under  this  Act  or  have  cause  of  action  against  such  em- 
ployer, as  if  this  Act  had  not  been  passed. 

Ibid,  sec.  45.     1916,  ch.  597. 

46.  Notwithstanding  anything  hereinbefore  or  hereinafter 
contained,  no  employe  or  dependent  of  any  employe  shall  be 
entitled  to  receive  any  compensation  or  benefits  under  this  Act 
on  account  of  any  injury  to  or  death  of  an  employe  caused  by 
self-inflicted  injury,  the  wilful  misconduct  or  where  the  injury 
or  death  resulted  solely  from  the  intoxication  of  the  injured 
employe.* 

1914,  ch.  800,  sec.  46. 

47.  If  it  be  established  that  the  injured  employe  was  of 
such  age  and  experience  when  injured  as  that  under  the  nat- 
ural conditions  his  wages  would  be  expected  to  increase,  this 
fact  may  be  considered  in  arriving  at  his  average  weekly 
wage. 

*Section  46.  See  opinion  of  S.  I.  A.  C,  Claim  327,  Andrew  P.  Miller, 
employe,  as  to  burden  of  proof,  with  subject  of  intoxication.  Claim 
allowed.  In  American  Ice  Co.,  vs.  Fitzhugh  (Daily  Record,  May  6, 
1916),  decided  by  Maryland  Court  of  Appeals  on  April  26,  1916,  the 
Court  said: 

"These  prayers  ignore  the  provision  of  the  Act  which  disentitled  the 
employe  to  recover  only  where  intoxication  is  the  sole  cause  of  the  in- 
jury which  results  in  death.  The  prayers  properly  present  the  defense 
of  contributory  negligence  applicable  to  ordinary  cases  of  negligence, 
but  the  Act  in  question  was  designated  to  abolish  the  defense  of  con- 
tributory negligence  in  cases  falling  within  its  provisions,  and  it  is 
only  where  intoxication  is  the  sole  cause,  and  not  the  contributory 
cause  of  the  injury,  that  it  can  be  relied  on  as  a  defense  to  the  claim 
of  the  employe  or  his  dependents.  In  other  words,  under  the  terms  of 
the  Act,  the  injury  for  which  the  compensation  is  sought  must  be  due 
exclusively  or  entirely  to  the  intoxication  of  the  employe  in  order  to 
constitute  a  defense  to  the  claim.  Sub-section  *  *  *  q  ot  section 
61  declares  that  "death"  referred  to  as  the  basis  of  compensation  under 
this  Act,  means  "only  resulting  from  such  injury,"  and  where  the 
injury  which  results  in  the  death  of  the  employe  results  solely  from 
intoxication,  the  defendants  are  not  entitled  to  compensation." 


221 


Ibid,  sec.  47. 

48.  A  minor  working  at  an  age  legally  permitted  under  the 
laws  of  this  State  shall  be  deemed  sui  juris  for  the  purposes  of 
this  Act,  and  no  other  person  shall  have  any  cause  of  action  or 
right  to  compensation  for  any  injury  to  such  minor  employe 
unless  otherwise  herein  provided. 

Ibid,  sec.  48.     1920,  ch.  456. 

49.  No  compensation  shall  be  allowed  for  three  days  after 
the  beginning  of  disability,  except  disbursements  herein  au- 
thorized for  medical,  nurse  and  hospital  services  and  medicines, 
and  for  funeral  expenses. 

Ibid,  sec.  49. 

50.  The  benefits  in  case  of  death  shall  be  paid  to  such  one 
or  more  of  the  dependents  of  the  decedent  for  the  benefit  of 
all  the  dependents  as  may  be  determined  by  the  Commission, 
which  may  apportion  the  benefits  among  the  dependents  in 
such  manner  as  it  may  deem  just  and  equitable.  The  depend- 
ent or  persons  to  whom  benefits  are  paid  shall  apply  the  same 
to  the  use  of  the  several  beneficiaries  thereof  according  to 
their  respective  claims  upon  the  decedent  for  support,  in  com- 
pliance with  the  findings  and  direction  of  the  Commission. 

Ibid,  sec.  50.     1920,  ch.  456. 

51.  In  every  case  providing  for  compensation  to  an  employe 
or  his  dependent,  excepting  temporary  disability,  the  Commis- 
sion may,  if  in  its  opinion  the  facts  and  circumstances  of  the 
case  warrant  it,  convert  the  compensation  to  be  paid  in  a 
partial  and  or  total  lump  sum. 

Ibid,  sec.  51. 

52.  No  money  payable  under  this  Act  shall,  prior  to  issu- 
ance and  delivery  of  the  warrant  or  voucher  thereof,  be 
capable  of  being  assigned,  charged  or  taken  in  execution  or 
attachment. 

Ibid,  sec.  52. 
43.     No  employer  or  employe  who  is  subject  to  the  provis- 
ions  of  this  Act  shall  exempt  himself  from  the   burden  or 


222 

waive  the  benefit  of  this  Act  by  any  contract,  agreement,  rule 
or  regulation,  and  any  such  contract,  agreement,  rule  or  regu- 
lation shall  be  pro  tanto  void.  No  agreement  by  such  employe 
to  pay  any  portion  of  the  premium  paid  by  such  employer  shall 
be  valid,  and  any  employer  who  deducts  any  portion  of  such 
premium  from  the  wages  or  salary  of  any  employe  entitled  to 
the  benefits  of  this  Act,  shall  be  guilty  of  a  misdemeanor  and 
upon  conviction  thereof  shall  be  fined  not  more  than  two  hun- 
dred dollars  for  each  offense. 

Ibid,  sec.  53. 

54.  The  powers  and  jurisdiction  of  the  Commission  over 
each  shall  be  continuing,  and  it  may  from  time  to  time  make 
such  modifications  or  change,  with  respect  to  former  findings 
or  orders  with  respect  thereto,  as  in  its  opinion  may  be  justi- 
fied. 

Ibid,  sec.  54. 

55.  If  an  employe  shall  be  injured  because  of  the  absence 
of  any  safeguard  or  protection  required  by  the  Commission, 
the  employer  shall  be  guilty  of  a  misdemeanor  and  liable  to 
a  fine  of  not  less  than  $50.00  or  more  than  $500.00,  to  be  paid 
into  the  State  Accident  Fund. 

Ibid,  sec.  55. 

56.  Any  employer,  employe,  beneficiary  or  person  feeling 
aggrieved  by  any  decision  of  the  Commission  affecting  his 
interests  under  this  Act,  may  have  the  same  reviewed  by  a 
proceeding  in  the  nature  of  an  appeal  and  initiated  in  the 
Circuit  Court  of  the  county  or  in  the  Common  Law  Courts 
of  Baltimore  City  having  jurisdiction  over  the  place  where  the 
accident  occurred  or  over  the  person  appealing  from  such 
decision,  and  the  Court  shall  determine  whether  the  Commis- 
sion has  justly  considered  all  the  facts  concerning  injury, 
whether  it  has  exceeded  the  powers  granted  it  by  the  Act, 
whether  it  has  misconstrued  the  law  and  facts  applicable  in 
the  case  decided.  If  the  Court  shall  determine  that  the  Com- 
mission has  acted  within  its  powers  and  has  correctly  con- 


223 

strued  the  law  and  facts,  the  decision  of  the  Commission  shall 
be  confirmed ;  otherwise  it  shall  be  reversed  or  modified.  Upoij 
the  hearing  of  such  an  appeal  the  Court  shall,  upon  motion  of 
either  party  filed  with  the  Clerk  of  the  Court  according  to  the 
practice  in  civil  cases,  submit  to  a  jury  any  question  of  fact 
involved  in  such  case.  The  proceedings  in  every  such  appeal 
shall  be  informal  and  summary,  but  full  opportunity  to  be 
heard  shall  be  had  before  judgment  is  pronounced.  No  such 
appeal  shall  be  entertained  unless  notice  of  appeal  shall  have 
been  served  personally  upon  some  member  of  the  Commission 
within  thirty  days  following  the  rendition  of  the  decision  ap- 
pealed from.  An  appeal  shall  not  be  a  stay.  If  the  decision 
of  the  Commission  shall  be  changed  or  modified,  the  practice 
prevailing  in  civil  cases  as  to  the  payment  of  costs  and  the 
fees  of  medical  and  other  witnesses  shall  apply.  Appeal  shall 
lie  from  the  judgment  of  the  Circuit  Court  of  the  county  or  the 
Common  Law  Courts  of  Baltimore  City  to  the  Court  of  Appeals 
as  in  other  civil  cases,  and  such  appeals  shall  have  precedence 
over  all  cases  except  criminal  cases.* 

*"It  would  have  been  observed  that  by  provisions  of  Section  56, 
already  quoted,  a  right  of  appeal  is  given  to  the  Court  having  jurisdic- 
tion over  the  place  where  the  accident  occured.  In  most  instances 
there  is  also  the  tribunal  having  jurisdiction  of  the  employer  and  em- 
ploye, and  certainly  is  the  jurisdiction  in  which  both,  if  not  all,  of  the 
witnesses  would  be  residents,  and  their  evidence,  therefore,  most  easily 
obtainable.  Then  follows  the  language  upon  which  the  appellants  re- 
ly: 'Over  the  person  appealing  from  such  decision.'  This  is  undoubtely 
sufficiently  broad  in  terms  to  include  an  insurance  carrier,  for  such 
carrier  is  already  a  party  interested,  but  was  that  carrier,  the  office  of 
which  might  be  in  a  distant  part  of  the  State,  to  be  entitled  to  claim, 
that  the  location  of  its  main  office  was  likewise  to  be  vested  with  the 
concurrent  jurisdiction?  This  Court,  looking  to  the  general  intent  of 
the  statute  as  set  out  in  Section  60,  cannot  come  to  that  conclusion. 
Brenner  vs.  Brenner,  127  Md.  187,  193-94.  While  the  decision  of  the 
Commission  is  prima  facie  correct,  any  party  appealing  may  in  a  trial 
court  offer  additional  evidence  over  the  above  than  that  offered  by  the 
Commission.  See  Frazier  vs.  Leas,  127  Md.  572.  The  party  appealing 
to  Court  from  a  decision  of  the  State  Industrial  Accident  Commission 
has  the  right  to  open  and  close  the  case.  American  Ice  Co.  vs.  Fitz- 
hugh.  (Daily  Record,  May  6,  1916,  decided  by  Maryland  Court  of  Ap- 
peals, April  26,-  1916.)  Section  61  (Code,  volume  3,  section  61),  see 
note  of  Section  56." 


224 

The  Attorney-General  shall  be  the  legal  adviser  of  the  Com- 
mission, and  shall  represent  it  in  all  proceedings  whenever  so 
requested  by  any  of  the  Commissioners.  In  all  Court  proceed- 
ings under  or  pursuant  to  this  Act,  the  decision  of  the  Com- 
mission shall  be  prima  facia  correct  and  the  burden  of  proof 
shall  be  upon  the  party  attacking  the  same. 

Ibid,  sec.  56. 

57.  If  the-  Commission  or  the  Court  before  which  any  pro- 
ceedings for  compensation  or  concerning  an  award  of  com- 
pensation have  been  brought  under  this  Act,  determines  that 
such  proceedings  have  not  been  so  brought  upon  reasonable 
ground,  it  shall  assess  the  whole  cost  of  the  proceeding  upon 
the  party  who  has  so  brought  them.  Claims  for  legal  services 
in  connection  with  any  claims  arising  under  this  Act,  and 
claims  for  services  or  treatment  rendered  or  supplies  furnished 
pursuant  to  Section  37  of  this  Act,  shall  not  be  enforceable 
unless  approved  by  the  Commission.  If  so  approved,  such 
claim  or  claims  shall  become  a  lien  upon  the  compensation 
awarded,  but  shall  be  paid  therefrom  only  in  the  manner  fixed 
by  the  Commission. 

Ibid,  sec.  57.     1920,  ch.  456.     1922,  eh.  303. 

58.  Where  the  injury  or  death  for  which  compensation  is 
payable  under  this  Act  was  caused  under  circumstances  creat- 
ing a  legal  liability  in  some  person  other  than  the  employer,  to 
pay  damages  in  respect  thereof,  the  employe,  or  in  the  case 
of  death  his  personal  representatives  or  dependents  as  here- 
inbefore defined,  may  proceed  either  by  law  against  that  other 
person  to  recover  damages,  or  against  the  employer  for  com- 
pensation under  this  Act,  or  in  case  of  joint  tortfeasors  against 
both;  and  if  compensation  is  claimed  and  awarded  or  paid 
under  this  Act,  any  employer,  if  he  is  self-insured,  insurance 
company,  association  or  the  State  Accident  Fund  may  enforce 
for  their  benefit,  as  the'  case  may  be,  the  liability  of  such  other 
person;  provided,  however,  if  damages  are  recovered  in  excess 
of  the  compensation  already  paid  or  awarded  to  be  paid  under 
this  Act,  and  also  any  payments  made  for  medical  or  surgical 


225 


services,  funeral  expenses  or  for  any  of  the  other  purposes 
enumerated  in  Section  37  of  this  Act,  then  any  such  excess 
shall  be  paid  to  the  injured  employe  or,  in  case  of  death,  to 
his  dependents,  less  the  expenses  and  costs  of  action  incurred 
by  the  employer,  insurance  company,  association  or  State  Acci- 
dent Fund,  as  the  case  may  be.  If  any  such  employer,  insur- 
ance company,  association  or  State  Accident  Fund  shall  not, 
within  two  months  from  the  passage  of  the  award  of  this 
Commission,  start  proceedings  to  enforce  the  liability  of  such 
other  person,  the  injured  employe,  or  in  ease  of  death,  his 
dependents,  may  enforce  the  liability  of  such  other  person, 
provided,  however,  that  if  damages  are  recovered  the  injured 
employe,  or  in  ease  of  death,  his  dependents,  may  first  retain 
therefrom  the  expenses  and  costs  by  action  after  which  the 
employer,  insurance  company,  association  or  the  State  Acci- 
dent Fund,  as  the  case  may  be,  shall  be  reimbursed  for  the 
compensation  already  paid  or  awarded  and  any  amount  or 
amounts  paid  for  medical  or  surgical  services,  funeral  expenses 
or  for  any  of  the  other  purposes  enumerated  in  Section  37  of 
this  Act,  and  the  balance  in  excess  of  these  items  shall  inure 
to  the  injured  employe,  or  in  case  of  death,  to  his  dependents, 
and  the  amount  thus  received  by  the  injured  employe  or  in 
case  of  death  by  his  dependents  shall  be  in  lieu  of  any  award 
that  might  otherwise  have  been  made  thereafter  in  the  same- 
case  under  the  provisions  of  this  Act  and  said  case  shall  there- 
upon be  deemed  to  have  been  finally  settled  and  closed.* 

Ibid,  sec.  58. 

59.  If  the  provisions  of  this  Act  relative  to  compensation 
for  injuries  to  or  death  of  employes  become  invalid  because 
of  any  adjudication,  or  be  repealed,  the  period  intervening 
between  the  occurrence  of  an  injury  or  death,  not  previously 
compensated  for  under  this  Act  by  lump  payment  or  com- 
pleted periodical  payments,  shall  not  be  computed  as  a  part 
of  the  time  limited  by  law  for  the  commencement  of  any  ac- 
tion relating  to  such  injury  or  death.     Provided,  that  such 

•As  amended  by  Chapter  456  Acts  of  1920;  and  by  Chapter  303, 
Acts  of  1922,  effective  April  13,  1922. 


(8) 


226 

action  be  commenced  within  one  year  after  such  repeal  or 
adjudication,  but  in  any  such  action  any  sum  paid  to  the  em- 
ploye on  account  of  injury,  for  which  the  action  is  prose- 
cuted, shall  be  taken  into  account  or  disposed  of  as  follows: 
If  the  defendant  employer  shall  have  insured  himself  as  pro- 
vided for  in  this  Act  without  delinquency,  such  sums  as  may 
have  been  paid  to  the  employe  or  his  dependents  on  account 
of  injury  or  death,  shall  be  credited  upon  recovery  as  pay- 
ment thereon. 

1916,  ch.  597,  sec.  59A. 
59A.  It  shall  be  the  duty  of  the  Clerk  of  the  Court  to 
which  a  case  is  sent  on  appeal,  under  the  preceding  section, 
to  send  to  the  Commission  a  duly  certified  copy  of  the  docket 
entries,  and  judgment  of  the  Court  in  each  case  heard  and 
determined  on  appeal. 

1914,  ch.  800,  sec.  59. 
60.  If  any  employer  shall  be  adjudicated  to  be  outside 
the  lawful  scope  of  this  Act,  the  Act  shall  not  apply  to  him 
or  his  employes;  if  any  employe  shall  be  adjudicated  to  be 
outside  the  lawful  scope  of  this  Act,  because  of  remoteness 
of  his  work  from  the  hazard  of  his  employer's  work,  any 
such  adjudication  shall  not  impair  the  validity  of  this  Act 
in  other  respects,  and  in  every  such  case  an  accounting  in 
accordance  with  the  justice  of  the  case  shall  be  had  of  moneys 
received. 

1916,  ch.  597,  sec.  60A. 

60A.  When  any  person  as  a  principal  contractor,  under- 
takes to  execute  any  work  which  is  a  part  of  his  trade,  busi- 
ness or  occupation  which  he  has  contracted  to  perform,  and 
contracts  with  any  other  person  as  subcontractor,  for  the 
execution  by  or  under  the  subcontractor,  of  the  whole  or  any 
part  of  the  work  undertaken  by  the  principal  contractor,  the 
principal  contractor  shall  be  liable  to  pay  to  any  workman 
employed  in  the  execution  of  the  work  any  compensation  under 
this  Article  which  he  would  have  been  liable  to  pay  if  that 
workman  had  been  immediately  employed  by  him;  and  where 
compensation  is  claimed  from  or  proceedings  are  taken  against 
the  principal  contractor,  then,  in  the  application  of  this  Article, 


227 

reference  to  the  principal  contractor  shall  be  substituted  for 
reference  to  the  employer,  except  that  the  amount  of  compen- 
sation shall  be  calculated  with  reference  to  the  earnings  of 
the  workman  under  the  employer  by  whom  he  is  immediately 
employed. 

Where  the  principal  contractor  is  liable  to  pay  compensa- 
tion under  this  section,  he  shall  be  entitled  to  indemnity 
from  any  employer  who  would  have  been  liable  to  pay  com- 
pensation to  the  employe  independently  of  this  section,  and 
shall  have  a  cause  of  action  therefor  against  such  employer. 

Nothing  in  this  section  shall  be  construed  as  preventing 
a  workman  from  recovering  compensation  under  this  Arti- 
cle from  the  subcontractor  instead  of  from  the  contractor. 

Whenever  an  employe  of  a  subcontractor  files  a  claim  under 
this  Article  against  the  principal  contractor,  the  principal 
contractor  shall  have  the  right  to  join  the  subcontractor  or 
any  intermediate  contractors  as  defendant  or  co-defendant 
in  the  case. 

Ibid,  sec.  60. 

61.  The  rule  that  statutes  in  derogation  of  the  common 
law  are  to  be  strictly  construed  shall  have  no  application  to 
this  Act ;  but  this  Act  shall  be  so  interpreted  and  construed  as 
to  effectuate  its  general  purpose. 

Ibid,  sec.  61.     1920,  ch.  456. 

62.  In  any  proceeding  for  the  enforcement  of  a  claim  for 
compensation  under  this  Act,  it  shall  be  presumed  in  the 
absence  of  substantial  evidence  to  the  contrary : 

(a)  That  the  claim  comes  within  the  provisions  of  this  Act. 

(b)  That  sufficient  notice  thereof  was  given. 

(c)  That  the  injury  was  not  occasioned  by  the  wilful  in- 
tention of  the  injured  employe  to  bring  about  the  injury  or 
death  of  himself  or  of  another. 

(d)  That  the  injury  did  not  result  solely  from  the  intoxi- 
cation of  the  injured  employe  while  on  duty. 

(e)  That  there  has  been  no  prejudice  caused  by  failure  to 
file  claim  within  thirty  (30)  days.* 

♦Amendment  by  General  Assembley  of  1920. 


228 

Ibid,  sec.  62.     1916,  ch.  597.     1916,  ch.  86. 
1920,  ch.  456.     1922,  ch.  303. 

63.     Definitions  as  used  in  this  Act : 

1.  "Extra-hazardous  employment"  means  a  work  or  oc- 
cupation described  in  Section  32  of  this  Act. 

2.  "Employer,"  except  when  otherwise  expressly  stated, 
means  a  person,  partnership,  association,  corporation,  and 
the  legal  representatives  of  a  deceased  employer  or  the  re- 
ceiver or  trustee  of  a  person,  partnership,  association  or  cor- 
poration employing  workmen  in  extra-hazardous  employments. 

3.  t" Employe"  means  a  person  who  is  engaged  in  an 
extra-hazardous  employment  in  the  service  of  an  employer, 
carrying  on  or  conducting  the  same  upon  the  premises  or 
at  a  plant,  or  in  the  course  of  his  employment  away  from 
the  plant  of  his  employer,  and  shall  not  include  farm  labor- 
ers. "Farm  Laborers,"  as  used  in  this  Act,  shall  mean  any 
employes  who,  at  the  time  of  the  accident,  are  engaged  in 
rendering  any  agricultural  service,  including  the  threshing  or 
harvesting  or  crops,  or  who,  at  the  time  of  the  accident  are 
engaged  in  service  incidental  to  and  in  connection  with  agri- 
cultural pursuits  or  developments,  whether  the  employer  be 
the  farmer  or  other  person  undertaking  or  contracting  with  the 
farmer  to  perform  any  such  agricultural  service,  pursuit,  or 
development.  This  Act  shall  not  apply  to  farm  laborers,  do- 
mestic  servants,  nor  to  country  blacksmiths,  wheelwrights  or 
similar  rural  employments,  unless  these  employments  elect  to 
come  under  this  Act  as  provided  in  Section  33,  nor  in  any  case 
where  the  accident  occurred  before  this  Act  takes  effect,  nor  to 
casual  employes,  or  any  employe  whose  salary  is  in  excess  of 
two  thousand  dollars  a  year  or  any  employes  who  are  employed 

fChapter  303,  Acts  of  1922,  which  amended  Sub-Section  3  and  took 
effect  April  13,  1922,  was  superseded  June  1,  1922  by  Chapter  529, 
Acts  of  1922,  which  tool?  effect  that  day  (see  Opinion  of  the  Attorney- 
General,  dated  May  25,  1922.)  Therefore,  for  coverage  of  this  law 
from  April  13,  to  June  1,  1922,  see  Chapter  303,  Acts  of  1922,  not  in- 
cluded in  this  pamphlet. 


229 


wholly  without  the  State.*  But  for  all  purposes  of  this  Arti- 
cle casual,  occasional,  or  incidental  employment  outside  of  this 
State  by  the  Maryland  employer  of  an  employe  or  employes 
regularly  employed  by  said  employer  within  this  State  shall  be 
construed  to  be  employment  within  this  State ;  provided,  how- 
ever, if  an  employe  or  the  dependents  of  an  employe  shall 
receive  compensation  or  damages  under  the  laws  of  any  other 
State,  nothing  herein  contained  shall  be  construed  so  as  to  per- 
mit a  total  compensation  for  the  same  injury  greater  than  is 
provided  for  in  this  Act. 

*Amendement  of  General  Assembley  of  1920. 

See  opinion  of  S.  I.  A.  C,  Claim  287,  William  Smith,  employe,  for 
medical  services  when  injury  did  not  arise  in  the  course  of  employ- 
ment. Not  allowed.  See  opinion  of  S.  I.  A.  C,  Claim  857,  Arthur  P. 
Decker,  employe.  Claim  that  workman  was  stabbed  by  a  fellow-work- 
man. Claim  disallowed.  See  opinion  of  S.  I.  A.  C,  Claim  315,  Thomas 
Hughes,  employe,  party  injured  going  to  work.  Claim  disallowed. 
See  opinion  of  S.  I.  A.  C,  Claim  4199,  Marie  Bouthner,  employe,  as  to 
right  of  accident  arising  out  of  and  in  the  course  of  her  employment. 
The  claimant  was  employed  as  a  dipper  in  an  enameling  department, 
and  used  a  tub  which  had  to  be  emptied  several  times  a  day.  The  em- 
ploye claimed  that  in  emptying  the  tub  she  had  injured  herself  so  as  to 
cause  a  lump  on  her  left  side.  Claim  was  allowed.  (Daily  Record, 
February  3,  1916.)  See  opinion  of  S.  I.  A.  C,  Claim  4698,  Samuel  J. 
Owens,  employe,  as  to  effect  when  foreman  took  injured  employe  be- 
yond the  scope  of  his  employment.  The  claim  was  disallowed.  (Daily 
Record,  April  17,  1916.)  See  opinion  of  S.  I.  A.  C,  Claim  285,  Charles 
H.  Meile,  employe,  horseplay.  Claim  allowed.  See  opinion  of  S.  I.  A. 
C,  Claim  335,  Martha  Heinmiller,  employe.  Claim  based  upon  injury 
when  going  to  work  and  claim  disallowed.  See  opinion  of  S.  I.  A.  C, 
Claim  435,  Charles  P^  Nelson,  employe.  Claim  based  upon  going  to 
work  and  disallowed  as  not  being  received  in  the  course  of  employ- 
ment. 

See  opinion  of  S.  I.  A.  C,  Claim  476,  Harold  Keene,  employe.  Claim 
based  upon  injury  while  going  to  supper.  Disallowed.  See  opinion  of 
S.  I.  A.  C,  Claim  1550,  Max  Altbroit,  employe,  held  that  evidence 
showed  relation  of  master  and  servant  and  claim  allowed.  See  opinion 
of  ».  I.  A.  C,  Claim  1643,  Samuel  Beamel,  employe,  as  to  injury  arising 
in  course  of  employment.  Employe  was  pushed  by  another  workman 
while  they  were  resting  and  injured.  Claim  disallowed.  See  opinion 
of  S.  I.  A.  C,  Claim  1641,  Henry  jOnley,  employe,  as  to  casual  em- 
ployment. 


fThis  subsection  is  an  amendment  made  by  the  Legislature  of  1916, 
ch.  597.  See  opinion  of  S.  I.  A.  C,  Claim  533,  Henry  Roemer,  employe, 
as  to  burden  of  proof.  See  opinion  of  S.  I.  A.  C,  Claim  503,  Cyrus  J. 
McClaim,  employe.  Approximate  cause,  apoplexy.  The  claim  was  dis- 
allowed. See  opinion  of  S.  I.  A.  C,  Claim  1618,  Luther  H.  Galloway, 
employe.  Disease  vs.  injury.  See  opinion  of  S.  I.  A.  C,  Claim  2799, 
Meyer  Snyder,  employe,  as  to  occupational  disease.  See  opinion  of 
S.  I.  A.  C,  Claim  2067,  Rufus  C.  Fleetwood,  employe,  as  to  disease  vs. 
injury  and  predisposing  physical  condition.  See  opinion  of  S.  L  A.  C, 
Claim  2095,  Sarah  Pollock,  claimant,  as  to  blood  poisoning,  approxi- 
mate cause  and  burden  of  proof.  See  opinion  Ipf  S.  I.  A.  C,  Claim 
1177,  Frank  W.  Krug,  employe,  as  to  personal  injury  and  occupational 
disease.  See  opinion  of  S.  I.  A.  C,  Claim  1823,  Harry  Cohen,  employe, 
as  to  occupational  disease.  See  opinion  of  S.  I.  A.  C,  Claim  1387, 
Winfield  Hensley,  employe,  disease  or  injury 

See  opinion  of  S.  I.  A.  C,  Claim  409,  William  Keating,  employe,  as 
to  average  daily  wages.  As  this  sub-section  now  reads,  it  is  an  amend- 
ment made  by  section  63,  sub-section  6,  of  the  Acts  of  1916,  ch.  597. 


230  \ 


4.  "Employment"  includes  employment  only  in  a  trade, 
business  or  occupation  carried  on  by  the  employer  for  pe- 
cuniary gain. 

5.  "Compensation"  means  the  money  allowance  payable 
to  an  employe  or  to  his  dependents  as  provided  for  in  this 
Act,  and  includes  funeral  benefits  provided  therein. 

6.  "Injury"  and  "Personal  Injury"  means  only  acciden- 
tal injuries  arising  out  of  and  in  the  course  of  employment, 
and  such  disease  or  infection  as  may  naturally  result  there- 
from. 

7.  "Death,"  when  mentioned  as  a  basis  for  the  right  to 
compensation,  means  only  death  resulting  from  such  injury. 

8.  "Average  weekly  wages"  for  the  purpose  of  this  Act 
shall  be  taken  to  mean  the  average  weekly  wages  earned  by 
an  employe  when  working  on  full  time.f 

9.  "State  Accident  Fund"  means  the  State  Insurance  Fund 
provided  for  in  Section  16  of  this  Act. 

10.  The  term  "child"  and  "children"  shall  include  post- 
humous children  and  adopted  children,  whether  members  of 
the  deceased  employe's  household  at  the  time  of  his  accident 
or  death  or  not,  and  shall  also  include  step-children,  illegiti- 
mate children  and  other  children,  if  such  step-children,  ille- 
gitimate  children  and  other   children  were   members   of  the 


231 

household  of  the  decedent  at  the  time  of  the  accident  or 
death  and  had  received  contributions  toward  their  support 
from  such  deceased  employe  during  any  part  of  the  six  months 
immediately  preceding  the  accident  or  death.** 

11,  "Beneficiary"  means  a  husband,  wife,  child,  children 
or  dependents  of  an  employe  in  whom  shall  vest  a  right  to 
receive  payment  under  this  Act. 

12.  "Mining"  means  all  underground  workings  by  shaft, 
drift,  slope  or  otherwise,  for  the  securing,  removing  and  taking 
out  from  under  the  ground,  coal,  iron  ore,  clays  and  all  other 
minerals  and  mineral  substances,  found  in  and  under  the  earth, 
and  shall  mean  all  work  done  by  any  miner  or  employe  work- 
ing in  and  about  said  mines  in  said  shafts,  slopes,  headings, 
tunnels,  rooms  and  other  subterranean  places  therein,  for  the 
purposes  of  obtaining  and  removing  therefrom  all  such  miner- 
als and  mineral  substances,  and  the  benefits  of  this  Act  shall 
be  extended  to  any  employe,  or  in  case  of  his  death,  to  his 
dependent  relatives,  otherwise  entitled,  who  shall  be  killed  or 
injured  while  so  working  or  employed  therein,  and  such  mine- 
worker  shall  be  deemed  to  be  wholly  employed  in  the  State  of 
Maryland,  and  entitled  to  the  benefits  of  this  Act,  if  the  tipple, 
mouth  or  principal  mine  entrance  in  and  about  which  he  works 
is  situated  in  this  State,  notwithstanding  such  shaft,  heading, 
slope  or  other  subterranean  tunnel  may  extend  underground 
into  an  adjoining  State,  and  notwithstanding  such  mine-worker 
so  employed  in  this  State  may  be  killed  or  injured  while  work- 
ing in  said  mine  beyond  the  lines  of  this  State  and  within  the 
lines  of  an  adjoining  State.* 

1914,  ch,  800,  sec.  63. 

64.  The  sum  of  forty  thousand  dollars  ($40,000)  annually 
for  the  years  1914,  1915  and  1916,  or  so  much  thereof  as  may 
be  necessary  annually  for  the  maintenance  of  the  State  Indus- 
trial Accident  Commission,  and  the  payment  of  the  salaries 
and  expenses  of  said  Commission  and  its  officers  and  employes, 
and  so  much  thereof,  if  any,  as  may  be  necessary  to  maintain 

♦♦Amendment  by  General  Assembly  of  1920. 

♦Being  the  amendment  made  by  Chapter  86  of  the  Acts  of  1916.. 


232 


a  solvent  State  Accident  Fund,  is  hereby  appropriated,  and 
shall  be  payable  on  the  order  or  orders  of  the  said  Commission 
from  time  to  time,  as  in  this  law  provided ;  and  the  Comptroller 
shall  draw  his  warrant  upon  the  Treasurer  of  Maryland,  as  in 
law  provided,  for  the  annual  appropriations.  And  a  further 
appropriation  is  hereby  made  of  the  sum  of  fifteen  thousand 
dollars  for  the  year  1914,  for  the  necessary  expenses  of  the 
aforesaid  State  Industrial  Accident  Commission  to  cover  print- 
ing, office  fixtures  and  such  other  legitimate  expenses  as  the 
Commission  may  incur  in  establishing  their  office,  or  offices,  as 
in  this  Act  contemplated,  and  the  Comptroller  of  the  State  of 
Maryland  shall  draw  his  warrant  upon  the  Treasurer  of  Mary- 
land for  the  said  sum  of  fifteen  thousand  dollars  ($15,000),  or 
any  part  thereof,  upon  the  order  or  orders  presented  to  the 
State  Comptroller  by  the  said  State  Industrial  Accident  Com- 
mission. 

65.  Chapter  153  of  the  Acts  of  1910,  as  amended  by  Chap- 
ter of  the  Acts  of  1912,  of  the  General  Assembley  of  Mary- 
land be  and  the  same  are  hereby  repealed,  except  for  the 
purpose  of  providing  confirmation  for  all  claims  which  may 
arise  thereunder,  prior  to  the  first  day  of  November,  1914; 
and  if  after  all  such  claims  are  paid  there  be  a  surplus  in  the 
fund,  it  shall  be  turned  over  to  the  Treasurer  of  Maryland  for 
the  account  of  the  State  Industrial  Accident  Fund,  but  if  there 
be  a  deficit  in  said  fund  at  the  time  this  Act  takes  effect  as 
between  employers  and  employes,  the  payments  provided  for 
under  Chapter  153  of  the  Acts  of  1910,  as  amended  by  Chapter 
445  of  the  Acts  of  1912,  shall  be  continued  by  the  employer 
and  employes  of  Allegany  and  Garrett  counties  to  the  Treasurer 
of  said  counties  until  such  pending  claims  are  paid,  when  said 
payments  shall  cease. 

66.  The  Acts  of  1902,  Chapter  139,  and  the  Acts  of  1912, 
Chapter  837,  be  and  the  same  are  hereby  repealed;  and  that 
all  Acts  or  parts  of  Acts  in  conflict  with  this  Act  are  hereby 
repealed  to  the  extent  that  they  conflict  with  this  Act  and  no 
further. 


233 

67.  This  Act  shall  take  .effect  from  the  date  of  its  passage, 
but  that  its  application  as  between  employers  and  employes 
shall  date  from  and  include  the  first  day  of  November,  one 
thousand  nine  hundred  and  fourteen. 

Approved : 

P.  L.  GOLDSBOROUGH,  Governor. 

JESSE  D.  PRICE,  President  of  the  Senate. 

JAS.  MeC.  TRIPPE,  Speaker  of  the  House  of  Delegates. 


STATE  OF  MARYLAND,  Set.: 

I,  Caleb  C.  Magruder,  Clerk  of  the  Court  of  Appeals  of 
Maryland,  do  hereby  certify  that  the  foregoing  is  a  full  and 
true  copy  of  the  Act  of  the  General  Assembly  of  which  it 
purports  to  be  a  copy,  as  taken  from  the  Original  Law  be- 
longing to  and  deposited  in  the  office  of  the  Clerk  of  the  Court 
of  Appeals  aforesaid. 

In   testimony  whereof,   I  have  hereunto   set 
my  hand  as  Clerk  and  affixed  the  seal  of  said 
(Seal)         Court  of  Appeals,  this  twentieth  day  of  April, 
1914. 

CALEB  C.  MAGRUDER, 
Clerk  Court  of  Appeals  of  Maryland. 

AMENDMENTS  OF  1920,  EFFECTIVE  JUNE  1,  1920 
SECTIONS  35  AND  58  AMENDED,  EFFECTIVE  APRIL  13,  1922. 
SECTIONS  17  AND   63  AMENDED,  EFFECTIVE  JUNE   1,  1922. 

Chapter  456,  Acts  of  1920. 

Section  6.  And  be  it  further  enacted.  That  this  Act  shall 
take  effect  on  and  after  June  1,  1920,  provided,  however,  that 
nothing  in  this  Act  shall  effect  any  rights  arising  from  injuries 
or  disabilities  received  prior  to  June  1,  1920. 


RULES  OF  PROCEDURE 

BEFORE  THE 

STATE  INDUSTRIAL 
ACCIDENT  COMMISSION 

OF  MARYLAND 


ADOPTED  MAY  11,  1920 
Effective  June  1,  1920 


^, 


237 


RULES  OF  PROCEDURE  BEFORE  THE  STATE  INDUSTRIAL 
ACCIDENT  COMMISSION  OF  MARYLAND 


The  following  rules  of  procedure  shall  be  in  effect  from  and  after 
June  1,  1920,  in  the  administration  of  the  Workmen's  Compensation 
Act  of  Maryland,  the  same  to  be  in  lieu  of  the  rules  of  November  1, 
1915,  provided,  that  the  Commission  may  amend  or  abrogate  any  rule 
in  order  to  further  the  proper  administration  of  the  Act. 

POSTING  OF  PLACARDS,  NOTICES,  ETC. 

Rule  No.  1.  All  placards,  notices,  etc.,  prepared  and  sent  out  by  the 
Commission  for  the  purpose  of  giving  instructions  or  conveying  infor- 
mation to  persons  interested  in  the  provisions  of  the  Act  or  entitled 
to  claim  the  benefits  of  its  provisions,  shall  be  kept  conspiciously 
posted  on  or  about  the  respective  plants  or  works  controlled  or  oper- 
ated by  the  employer  to  whom  the  same  are  sent. 

STOCK  AND  MUTUAL  COMPANY  INSURANCE 

Rule  No.  2.  Every  stock  corporation  or  mutual  association  carrying 
insurance  under  the  Workmen's  Compensation  Act  shall  file  with  the 
Commission  a  certificate  of  insurance  within  ten  days  after  issuing  said 
policy  in  the  following  form: 

Form  S.  I.  A.  C.  A-10.        Notice  of  Insurance.        S.  I.  A.  C.  No 

TO  THE  STATE  INDUSTRIAL  ACCIDENT  COMMISSION, 
BALTIMORE,  MD. 

The  undersigned  Insurance  Carrier  hereby  certifies  that  it  has  in- 
sured the  employer  named  below,  in  compliance  with  section  15,  chap- 
ter 800,  Acts  of  General  Assembly,  1914,  as  amended  by  Acts  of  1916 
and  1920  (Workmen's  Compensation  Law)  under  the  Universal  Stand- 
ard Form  Policy  (unless  otherwise  indicated  hereon*)  adopted  by  your 
Commission,  a  copy  of  which  has  been  filed  with  your  office. 

Employer 

Post  Office  Address 

Nature  of  Business 

Place  of  Business 

Annual  Pay  Roll Annual  Premium 

No.  of  Policy Date Expires 

*If  Standard,  Chauffeurs,  or  Combination  Coal  Mining  Policy  indicate 

here   •  • 

By 

Insurance  Carrier.  Authorized  Agent. 

(The  above  certificate  to  be  on  a  card  3  inches  by  5  inches.) 


238 


APPLICATION  FOR  SELF-INSURANCE 

Rule  No.  3.  Persons  or  corporations  wishing  to  adopt  the  "Self- 
Insurance"  plan,  as  provided  for  in  section  15,  subsection  3,  of  the  Act, 
shall  be  required  to  make  application  therefor  on  the  blank  form  pre- 
pared by  the  Commission  for  that  purpose. 

All  information  required  by  the  Commission  as  indicated  on  said 
form  shall  be  fully  and  particularly  set  forth  therein,  and  shall  be 
sworn  to  by  the  applicant,  or  someone  on  his  behalf,  who  has  personal 
knowledge  of  the  matters  set  forth;  and  the  Commission  may  call  for 
such  further  proof  as  the  circumstances  seem  to  require. 

SECURITY  TO  BE  GIVEN  BY  SELF-INSURERS 

Rule  No.  4.  Should  the  Commission  find  that  the  applicant  is  pos- 
sessed of  sufficient  financial  ability  to  render  certain  the  compensation, 
etc.,  provided  for  in  the  Act,  the  application  shall  be  granted,  upon 
condition  however,  that  the  applicant  execute  a  bond  with  corporate 
surety  and  of  such  penalty  as  shall  be  approved  by  the  Commission, 
not  in  any  case  to  be  less  than  $5,000,  or  deposit  with  the  Commission 
securities  such  as  are  accepted  by  the  Equity  Courts  of  Baltimore 
city  for  the  investment  of  trust  funds  in  an  amount  to  be  determined 
by  the  Commission,  in  no  case,  however,  to  be  below  the  par  value 
of  $5,000. 

Where  the  application  for  self-insurance  is  filed  by  the  State,  a 
county,  a  city  or  any  municipality,  or  by  any  Public  Service  Corpora- 
tion, the  above  requirement  as  to  the  filing  of  bond  or  depositing  se- 
curities may,  in  the  descretion  of  the  Commission,  be  waived. 

AN  EMPLOYER  CARRYING  HIS  OWN  RISK  AN  "INSURER" 

Rule  No.  5.  After  an  employer  has  been  granted  the  privilege  of 
carrying  his  own  risk  he  shall  be  considered  an  insurer  and  shall  in 
all  respects  comply  with  the  provisions  of  the  Act  and  the  rules  and 
regulations  of  the  Commission  in  the  same  manner  and  to  the  same 
extent  as  is  required  of  other  insurers. 

PROCEDURE  WITH  RESPECT  TO  CLAIMS 

Rule  No.  6.  All  claims  shall  be  filed  upon  blank  forms  provided  for 
that  purpose.  Claims  for  non-fatal  injuries  shall  be  made  out  on 
Form  C-7.  Claims  of  dep'endents  of  an  employe  whose  injury  caused 
death  shall  be  filed  on  Form  C-14  or  C-15,  as  the  case  may  be.  Upon 
receipt  of  a  claim,  notice,  unless  waived,  shall  be  given  to  all  parties 
of  the  day  (not  exceeding  ten  (10)  days  from  the  receipt  of  the  claim) 
that  the  Commission  will  take  up  said  claim  for  consideration.  Cer- 
tificate of  attending  physician  must  be  furnished  by.  claimant,  provided 
he  was  attended  by  a  physician  of  his  own  selection.  In  all  other 
cases  the  report  of  the  attending  physician  shall  be  furnished  by  the 


239 


insurer  or  by  the  employer,  if  self-insurer,  but  if  the  same  is  not  filed 
on  or  before  the  consideration  date,  the  claim  will  be  disposed  of  on 
the  record  as  it  then  stands.  If  no  request  for  a  hearing  or  continu- 
ance shall  have  been  received  on  or  before  the  day  so  named,  the  Com- 
mission will  proceed  to  dispose  of  the  claim  on  the  evidence  then 
before  it. 

PROOF  OF  AVERAGE  WEEKLY  WAGE 

Rule  No.  7.  If  the  statements  of  the  employer  and  of  the  employe 
as  to  his  average  weekly  wage  contained  in  their  respective  notices  of 
injury,  claim  for  compensation,  etc.,  agree,  the  Commission,  at  its  dis- 
cretion may  make  its  award  on  the  basis  of  that  average  weekly  wage 
without  requiring  other  evidence  regarding  same;  otherwise  an  inves- 
tigation shall  be  made  and  such  further  evidence  required  as  the  Com- 
mission may  deem  necessary  to  determine  the  average  weekly  wages, 
under  provision  of  section  63,  sub-section  8,  of  the  Act. 

CLAIM    FOR    COMPENSATION    FOR    DISABILITY    OR    DEATH 

MUST  BE  FILED  WITH  THE  C0:MMISSI0N  BEFORE  ANY 

PAYMENT  IS  MADE  ON  ACCOUNT   OF  SAME 

Rule  No.  8.  The  insurer  or  employer  shall  not  pay,  either  in  whole 
or  in  part,  any  claim  for  compensation  for  disability  or  death  arising 
under  the  provisions  of  the  Act  until  a  claim  for  the  same,  prepared  in 
the  usual  form,  shall  have  been  filed  with  the  Commission. 

This  rule  shall  not  apply  to  services  for  first  aid  to  injured,  etc., 
arising  under  the  provisions  of  section  37  of  the  Act.  Payments  on 
this  account  may  be  made  at  any  time. 

REQUEST  FOR  HEARING 

Rule  No.  9.  Each  request  for  a  hearing  on  any  claim  for  compensa- 
tion shall  be  in  writing,  filed  with  the  Commission,  and  shall  state 
with  particularity  the  issues  of  fact  and  law  proposed  to  be  raised  at 
the  hearing. 

PROCEDURE  UNDER  CONTESTED  CLAIMS 

Rule  No.  10.  Every  hearing  upon  a  claim,  held  before  the  Com- 
mission, a  commissioner,  or  an  arbitration  committee  shall  be  con- 
ducted as  a  judicial  proceeding,  all  witnesses  testifying  under  oath  or 
by  affi'rmation,  and  a  record  of  the  proceedings  shall  be  made  and  kept. 
At  such  hearing  the  investigation  shall  be  conducted  in  such  manner 
as  to  ascertain  the  substantial  rights  of  the  parties  and  the  Commis- 
sion, commissioner,  or  arbitration  committee  shall  not  be  bound  (see 
section  10  of  the  Act)  by  common  law  or  statutory  rules  of  evidence  or 
by  technical  or  formal  rules  of  procedure.  Books  or  papers  pertinent 
to  the  inquiry  shall  be  produced  upon  order  of  the  Commission  or 
Commissioner. 


240 


REQUISITES  TO  APPLICATION  FOR  REVIEW 

Rule  No.  11.  The  Commission  will  not  grant  reviews  of  awards  upon 
application  of  a  party  or  parties  except  such  application  be  made  upon 
the  grounds  of  a  change  in  conditions,  as  provided  in  section  40  of  the 
Act,  and  be  accompanied  with  statement  of  facts  alleged  to  constitute 
such  change  of  conditions,  but  upon  its  own  motion  it  will  exercise  its 
continuing  jurisdiction  over  each  case,  and  for  reasons  deemed  by  it 
to  be  sufficient  will,  from  time  to  time,  make  such  modification  or 
change  with  respect  to  its  former  findings  or  orders  relating  to  any 
such  case  as  in  its  opinion  may  be  just,  including  the  making  of  awards 
in  cases  where  they  may  have  been  denied,  but  no  award  will  be 
changed  or  modified  upon  ex  parte  information  unless  said  informa- 
tion is  against  the  interest  of  the  party  giving  same. 

REHEARING 

Rule  No.  12.  Applications  for  a  rehearing  shall  be  in  writing  and 
must  be  filed  within  thirty  days  from  the  date  of  the  decision.  No  re- 
hearing shall  be  granted  except  upon  the  grounds  of  error  or  newly 
discovered  evidence. 

MEDICAL  EXAMINER 

Rule  No.  13.  All  physicians'  reports  in  connection  with  claims  shall 
be  submitted  to  the  Chief  Medical  Examiner  for  examination  and  re- 
port in  writing. 

Whenever  it  is  deemed  necessary  the  Commission  or  a  Commissioner 
may  order  the  examination  of  a  claimant  by  the  Chief  Medical  Exami- 
ner. If  able  to  do  so,  the  claimant  must  present  himself  at  the  office  of 
the  Chief  Medical  Examiner,  or  a  physician  selected  by  him  or  the 
Commission,  when  requested.  If  the  claimant  is  not  able  to  attend 
there,  the  physician  must  call  upon  him. 

Any  case  calling  for  expert  examination  may  be  referred  to  a  spe- 
cialist employed  by  the  Commission  for  his  examination.  The  expense 
of  all  such  examinations  shall  be  paid  for  by  the  Commission  at  rea- 
sonable rates  agreed  upon  by  it  and  the  medical  examiner. 

HOW  EMPLOYES  MAY  SERVE  NOTICE  ON  EMPLOYERS 

Rule  No.  14.  All  notices  to  an  employer  required  by  the  Workmen's 
Compensation  Act  to  be  given  by  an  employe  shall  be  served  upon  the 
employer,  or  upon  one  employer  if  there  are  more  than  one,  or  upon 
any  officer,  agent,  or  foreman  of  a  corporation  if  the  employer  is  a 
corporation,  by  delivering  the  notice  to  the  person  on  whom  it  is  to  be 
served,  or  by  leaving  it  at  his  residence  or  place  of  business,  or  by 
sending  it  by  registered  mail  addressed  to  the  person,  firm,  or  corpora- 
tion on  whom  it  is  to  be  served,  at  his  or  its  last  known  residence  or 
place  of  business.    Notice  may  be  either  oral  or  written. 


' 


241 


NOTICES  EMANATING  FROM  THE  COMMISSION 

Rule  No.  15.  All  notices  emanating  from  the  Commission  (except 
subpoenas  for  witnesses)  shall  be  served  personally  or  by  mailing  in 
due  course  a  copy  to  each  interested  party  to  his  last  known  post- 
office  address. 

HEARING  BY  ARBITRATION  COMMITTEE 

Rule  No.  16.  E^^ery  hearing  upon  a  claim  held  before  an  arbitration 
committee  appointed  under  the  provisions  of  section  40  of  the  Act 
shall  be  conducted  as  a  judicial  proceeding  (all  witnesses  testifyingi 
under  oath  or  affirmation)  and  a  record  of  the  proceedings  shall  be 
made  and  kept.  Such  hearings  shall  be  conducted  in  such  manner  as 
to  ascertain  the  substantial  rights  of  the  parties,  and  the  arbitration 
committee  therein  shall  not  be  bound  by  common  law  or  statutory  rules 
of  evidence  or  by  technical  or  formal  rules  of  procedure. 

STENOGRAPHER'S  REPORT  OF  PROCEEDINGS  BEFORE 
ARBITRATION  COMMITTEE 

Rule  No.  17.  The  proceedings  of  every  hearing  before  an  arbitra- 
tion committee  shall  be  taken  down  by  a  stenographer  appointed  by 
the  Commission  and  a  report  thereof  certified  by  such  stenographer  to 
be  a  true  and  correct  report  of  such  proceedings  and  to  have  been 
carefully  compared  by  him  with  his  original  notes  may  be  received  in 
evidence  before  the  Commission  on  appeal  to  it,  with  the  same  effect 
as  if  the  witness  or  such  stenographer  were  present  and  testified  to 
the  facts  so  certified. 

NOTICE  OF  AWARD  BY  AN  ARBITRATION  COMMITTEE 

Rule  No.  18.  In  a  case  where  an  arbitration  committee  shall  have 
made  an  award,  decision,  or  order,  as  provided  in  section  40  of  the  Act, 
notice  thereof  shall  be  mailed  to  the  employer,  his  insurance  carrier, 
and  each  claimant  for  compensation,  specifying  the  day  upon  which 
the  same  will  be  brought  before  the  Commission  for  approval  and 
confirmation,  and  upon  such  day,  or  any  subsequent  day  to  which  said 
consideration  may  be  adjourned,  the  Commission  may  approve  and  con- 
firm such  award,  decision,  or  order,  and  order  the  same  filed  in  its 
office,  or  may  modify  the  same,  and,  as  so  modified,  approve,  confirm, 
and  order  it  filed,  or  may  wholly  reject  the  same  and  make  its  own 
award  with  or  without  further  investigation  or  hearing. 

REPEAL,  A]\IENDMENT  OR  ADOPTION  OF  RULES 

Rule  No.  19.  The  rules  of  the  Commission  are  subject  to  repeal  or 
amendment  or  to  adoption  of  any  new  rule  or  rules  at  any  time  by 
vote  of  a  majority  of  the  Commission. 


DECISIONS 


—BY 


THE  COURT  OF  APPEALS 


-OF— 


MARYLAND 


ON— 


THE 
WORKMEN'S  COMPENSATION 

LAW 


—OP- 


MARYLAND 


245 


DECISIONS  BY  THE  COURT  OF  APPEALS  OF  MARYLAND  ON  THE 
WORKMEN'S  COMPENSATION  LAW  OF  MARYLAND. 


The  following  cases  concerning  the  law  have  been  passed  upon  by 
the  Court  of  Appeals: 

Brenner  vs.  Brenner,  127  Md.,  189. 
Where  appeal  must  be  taken. 

Frazier  vs.  Leas,  127  IMr.,  572. 
Procedure  on  appeal. 

American  Ice  Co.  vs.  Fitzhugh,  128  Md.,  382. 
Procedure  on  appeal — Intoxication. 

Slavuca  vs.  Ryan  &  Reilly  Co.,  129  Md.,  235. 
Eemployer  must  show  he  has  complied  with  Act. 

Aldeman  vs.  Ocean  Accident  &  Guar.  Corp.,  130  Md.,  572. 
Dependency — determined  at  time  of  injury. 

Slavuca  vs.  Ryan  &  Reilly  Co.,  131  Md.,  265. 
Constitutionality  of  Act. 

B.  &.   O.  R.  R.  vs.  Branson,  131  Md.,  686. 
Act  creates  new  cause  of  action. 

Baltimore  Car  &  Foundry  Co.  vs.  Ruzicka,  132  Md.,  494. 
Wilful  misconduct. 

Kendall  Lumber  Co.  vs.  State,  132  Md.,  100. 

Dismissal  of   claim  by  State  Industrial   Accident  Commission  does 
not  bar  action  at  law. 

Jewel  Tea  Co.  vs.  Weber,  132  Md.,  178. 
Sufficiency  of  proof  of  injury.     Burden  of  proof. 

Coastwise  Shipbuilding  Co.,  vs.  Tolson,  132  Md.,  203. 
Effect  of  ruling  of  State  Industrial  Accident  Commission.     Burden 
of  proof. 

U.  S.  Fidelity  &  Guaranty  Co.,  vs.  Taylor,  132  Md.,  511. 
Insurance   Co.    can   recover  from   emplyer   compensation   paid   an 
employe  not  covered  by  its    policy. 


246 

Beasman  vs.  Butler,  133  Md.,  387. 
Burden  of  proof — Questions  for  injury. 

Grant  vs.  Kotwell,  133  Md.,  578. 

Partial  dependency — Sufficiency  of  evidence. 

State  Accident  Fund  vs.  Jacobs,  134  Md.,  135. 
Causual  employment. 

Harrison  vs.  Central  Construction  Co.,  135  Md.,  170. 
What  claimant  must  establish. 

Hagerstown  vs.  Schreiner,  135  IMd.,  650. 
Act  exclusive  remedy. 

Scott  vs.  Independent  Ice  Co.,  135  Md.,  343. 
Who  are  dependents. 

State  Industrial  Accident  Commission  vs.  Downton,  135  Md.,  412. 
Total  and  partial  dependency. 

Picanardi  vs.  Emerson  Hotel  Co.,  135  Md.,  92. 
Board  as  part  of  wages. 

Giggendelle  vs.  Piedmont  &  George's  Creek  Coal  Co.,  136  Md. 
Compensation  to  remarried  widow  stops  when  no  dependent  children 
at  time  of  remarriage. 

U.  S.  Fidelity  &  Guaranty  Co.,  vs.  Taylor,  136  Md. 
Only  relief  from  award  is  appeal. 

Stewart  «S;  Company  vs.  Howell,  136  Md. 
Evidence — Burden  of  proof  on  appeal. 

Hollant  Manufacturing  Co.  vs.  Thomas,  136  Md. 

Appeal  must  be  taken  within  thirty  days  following  opinion  of  Com- 
mission. 

Fannie  Lynch  vs.  Thistle  Mills,  Inc.,  136  Md. 

When  accident  arrises  out  of  and  in  the  course  of  employment. 

Josephine  Giggndelle  vs.  Piedmont  and  George's  Creek  Coal  Com- 
pany, 137  Md. 
Dependent  widow Remarriage  without   children. 


247 


Thistle  Mills,  Inc.,  vs.  Laban  Sparks,  Committee,  137  Md. 
Course  of  employment — Presumption  in  favor  of  decision — Accident 
to  autobus  driver — Instructions. 

Charles  Schiller  vs.  The  Baltimore  &  Ohio  Railroad  Co.,  137  Md. 
Issues    of    fact — Submission    to    jury — Continuing    compensation — 
Possibility  of  operation — Medical  testimony. 

The  Central  Construction  Corporation  vs.  Joel  Harrison,  137  I\Id. 
Injury  in  course  of  employment — Transportation  to  place  of  woi'k — 
Railroad  Train. 

Evan  H.    Bell   vs.   Egil   Steen   and   Edwin    S.    Steen,   Trading  as   E. 
Steen  &  Brothers,  137  Md. 
Course  of  employment — Questions  for  jury. 

Walker  D.  Hines,  Director  General  of  Railroads  vs.  Gena  I.  Beach- 
tel.  et  al,  137  :\Id. 

Railroad  employe — Interstate  Commerce. 

Emilie  Taylor  vs.  Robert  Ramsey  Company,  et  al.,  139  Md. 
Presumption  as  to  Jurisdiction— Collateral  Attack. 

Baltimore   Dry    Docks    and    Shipbuilding   Company,    et    al,    vs.    Eva 
Webster,  139  Md. 

Injury  arising  out  of  employment — Fall  resulting  from  vertigo. 


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UNIVERSITY  OF  CAUFORNIA  UBRARY 


